Topline
A long-awaited merger between a cash-rich acquisition company and former President Donald Trump’s social media platform Truth Social will have another 12 months to be completed after shareholders of Digital World Acquisition Corp voted for an extension, giving Trump’s company another chance at $300 million through the merger, which has faced regulatory setbacks.
A blank check firm extended a deadline to acquire former President Donald Trump’s Truth Social by … [+]
Key Facts
The two companies had faced a September 8 deadline for a merger or an extension, or else Digital World would have been required to return at least $300 million it raised to company shareholders, at roughly $10.24 per share.
Failure to extend the deadline or close on the merger would have also prevented Trump Media & Technology Group from going public, which DWAC, a Nasdaq-listed blank check firm, had agreed to do.
Digital World’s shareholders had previously voted last September to extend the deadline, though the company’s acquisition of Trump Media had been mired in multiple controversies, including a DWAC board member and two other people in the company being arrested and charged with insider trading in June.
The SPAC had also agreed in July to pay $18 million to settle a Securities and Exchange Commission investigation into the merger.
Key Background
DWAC agreed to acquire Truth Social parent company Trump Media & Technology Group in October 2021, after Trump announced his intention to launch the platform after being booted from Twitter in the wake of the January 6 Capitol insurrection. In the nearly two years since that agreement, however, the merger has been plagued by delays, including the SEC’s probe into potential securities violations after DWAC allegedly held talks with Trump Media before going public. DWAC also removed its then-CEO Patrick Orlando earlier this year.
Tangent
Since launching Truth Social early last year, Trump has been a constant presence on the platform, using his account frequently to post polls showing his lead in the 2024 presidential primary race, slamming prosecutors in four indictments against him, releasing campaign videos and even releasing a line of digital trading cards.
Surprising Fact
Before launching Truth Social, Trump had been a frequent Twitter user, relying on the platform to promote his campaign, make statements and launch tirades during his presidency and heading up to the 2020 presidential election. Trump’s account was reinstated last November after a year-long ban, though the former president refused to post on the platform until last month, when he posted: “ELECTION INTERFERENCE” after his mug shot was taken in his election interference case in Georgia. That post was Trump’s first on X since January 8, 2021.
Further Reading
Will Trump’s Social Network Go Public? Truth Social’s Parent Faces Looming Deadline This Week. (Forbes)
Ex-Board Member Of Trump’s SPAC Arrested For Insider Trading (Forbes)
Truth Social SPAC Agrees To Pay $18 Million To Settle SEC Investigation Into Merger (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2023/09/05/trumps-truth-social-merger-granted-one-more-year-to-close-deal/