Running out of time for that extension....
A firm aiming to merge with the social media platform Truth Social’s parent company faces an important deadline next week to close the deal.
Digital World Acquisition Corp. (DWAC) and Trump Media and Technology Group (TMTG), Truth Social’s parent company, plans to merge in October 2021. DWAC is a “blank check” created to merge with a technology company, and faces liquidation if it doesn’t meet a Sep. 8 for the merger to close.
TMTG needs the money from the acquisition firm to go public. If it goes through, the merger could result in $1 billion in funding.
The deadline for the merger was extended in Nov. 2022 by a shareholder vote. The Securities and Exchange Commission fined DWAC in July for allegedly planning on buying the Trump company before it raised its $300 million in IPO funds, but not revealing the plan to investors as required.
“DWAC failed to disclose its discussions with TMTG and failed to disclose a material conflict of interest of its CEO and Chairman,” SEC enforcement director said in a statement at the time.
Three Florida men were also arrested in June on insider trading charges related to the merger, to the Justice Department.
%20the%20merger%20to%20close.
Trump’s Truth Social facing a key funding deadline
The ‘blank check’ ally of former president Donald Trump’s media start-up was once a stock-market star. It’s now days away from potential liquidation.
Now, almost two years later, the deal faces what could be a catastrophic threat. With the merger stalled for months, Digital World is fast approaching a Sept. 8 deadline for the merger to close and has scheduled a shareholder meeting for Tuesday in hopes of getting enough votes to extend the deadline another year.
If the vote fails, Digital World will be required by law to liquidate and return $300 million to its shareholders, leaving Trump’s company with nothing from the transaction.
For Digital World, it would signal the ultimate financial fall from grace for a special purpose acquisition company, or SPAC, that turned its proximity to the former president into what was once one of the stock market’s hottest trades. Its share price, which peaked in its first hours at $175, has since fallen to about $14.
Digital World’s efforts to merge with Trump Media have been troubled almost from the start, beset by allegations that it began its conversations with the former president’s company before they were permitted under SPAC rules.
Then, in the past year, its issues became more pronounced: Its chief executive was by the board, a former board member was on charges of insider trading, and the company agreed to pay an $18 million settlement to resolve charges that it had and given false information to the Securities and Exchange Commission.
The merger has “been pretty much unprecedented in terms of all of the glitches,” said Jay Ritter, a University of Florida finance professor who studies stock markets. “The deal does seem to be running out of time. You can’t just keep getting extensions forever.”
A firm aiming to merge with the social media platform Truth Social’s parent company faces an important deadline next week to close the deal.
Digital World Acquisition Corp. (DWAC) and Trump Media and Technology Group (TMTG), Truth Social’s parent company, plans to merge in October 2021. DWAC is a “blank check” created to merge with a technology company, and faces liquidation if it doesn’t meet a Sep. 8 for the merger to close.
TMTG needs the money from the acquisition firm to go public. If it goes through, the merger could result in $1 billion in funding.
The deadline for the merger was extended in Nov. 2022 by a shareholder vote. The Securities and Exchange Commission fined DWAC in July for allegedly planning on buying the Trump company before it raised its $300 million in IPO funds, but not revealing the plan to investors as required.
“DWAC failed to disclose its discussions with TMTG and failed to disclose a material conflict of interest of its CEO and Chairman,” SEC enforcement director said in a statement at the time.
Three Florida men were also arrested in June on insider trading charges related to the merger, to the Justice Department.
%20the%20merger%20to%20close.
Trump’s Truth Social facing a key funding deadline
The ‘blank check’ ally of former president Donald Trump’s media start-up was once a stock-market star. It’s now days away from potential liquidation.
Now, almost two years later, the deal faces what could be a catastrophic threat. With the merger stalled for months, Digital World is fast approaching a Sept. 8 deadline for the merger to close and has scheduled a shareholder meeting for Tuesday in hopes of getting enough votes to extend the deadline another year.
If the vote fails, Digital World will be required by law to liquidate and return $300 million to its shareholders, leaving Trump’s company with nothing from the transaction.
For Digital World, it would signal the ultimate financial fall from grace for a special purpose acquisition company, or SPAC, that turned its proximity to the former president into what was once one of the stock market’s hottest trades. Its share price, which peaked in its first hours at $175, has since fallen to about $14.
Digital World’s efforts to merge with Trump Media have been troubled almost from the start, beset by allegations that it began its conversations with the former president’s company before they were permitted under SPAC rules.
Then, in the past year, its issues became more pronounced: Its chief executive was by the board, a former board member was on charges of insider trading, and the company agreed to pay an $18 million settlement to resolve charges that it had and given false information to the Securities and Exchange Commission.
The merger has “been pretty much unprecedented in terms of all of the glitches,” said Jay Ritter, a University of Florida finance professor who studies stock markets. “The deal does seem to be running out of time. You can’t just keep getting extensions forever.”
ProblemChild_JakePaul
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