Shareholders of Digital World Acquisition (DWAC), the investment partner of former President Donald Trump’s media venture, have granted an extension to the company’s merger deadline. This extension allows the special purpose acquisition company (SPAC) more time to complete its long-pending merger with Truth Social, a social network with pro-Trump leanings.
The extension comes after a concerted effort to secure shareholder approval, arriving just three days before the liquidation deadline of Truth Social on September 8. A failure to secure shareholder approval would have compelled the SPAC to dissolve, resulting in the return of $300 million to shareholders, depriving Trump Media & Technology Group of the funds associated with the deal.
However, the merger still faces challenges, including meeting closing conditions and resolving issues raised by the Securities and Exchange Commission (SEC). In July, the SEC alleged that Digital World had misled investors in its official merger documents. Correcting these inaccuracies and resubmitting the filings is necessary before the merger process can proceed. Additionally, required quarterly financial statements covering operations in the first half of 2023 have not been filed with the SEC.
Digital World Acquisition had initially anticipated a year for the merger process when it went public in September 2021 but has encountered several hurdles necessitating deadline extensions, including a previous one in September 2022.
Following the news of the extension, Digital World’s shares experienced a rise to over $18 before settling at $16.80 per share at 11 a.m. The stock had reached its peak at approximately $175 per share in 2021.
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