Digital World Acquisition Corp., the special purpose acquisition company planning to take former President Donald Trump’s media firm public, scheduled a shareholder meeting Tuesday as it seeks to extend the deadline for the merger for as much as a year.
Trump Media and Technology Group and the SPAC have faced increasing scrutiny in recent months. A federal probe was launched into possible securities violations over the deal. Fox Business reported that Truth Social was in financial trouble and had failed to pay a vendor over $1 million in contractually obligated payments, an allegation which the company denied.
DWAC itself warned shareholders that a decline in the ex-president’s popularity could hurt the deal. Indeed, the vote comes amid a Justice Department criminal probe into whether Trump illegally removed thousands of White House documents, including those marked “Top Secret” and “Classified,” to his Mar-a-Lago private home after he left the presidency.
Truth Social has faced its own scrutiny. The app was barred from the Google Play store for violating the store’s policies regarding the moderation of user-generated content. The platform remains accessible online and on the Apple App Store.
DWAC and Trump Media face a Thursday deadline to complete the merger, and the SPAC is eagerly seeking an extension.
DWAC needs 65% of shareholders to approve the delay. Patrick Orlando, DWAC’s CEO, has issued a barrage of pleas to shareholders through various channels, including Truth Social, urging them to approve the extension. Non-votes are essentially counted as “no” votes.
Some of the SPACs institutional investors, including Lighthouse Investment Partners and Pentwater Capital Management, didn’t comment on the upcoming vote when reached by CNBC. Citadel Investment Group said the company is holding stock as a “market maker,” not as a voting shareholder.
DWAC has warned previously that a “no” result could force DWAC into liquidation. The SPAC does, however, have built-in extensions of up to six months that can be initiated by sponsors adding money to the trust.
Orlando’s company, ARC Global Investments, holds 20% of these votes itself, he disclosed in an interview last Thursday with IPO Edge. Still, he said, “the retail shareholder holds a lot of weight.”