Digital World Acquisition Corp. adjourned its shareholder meeting after two minutes on Tuesday and said it will continue counting votes on whether to delay a merger with former President Donald Trump’s media company.
Shares of DWAC closed down around 11%. The special shareholders meeting was adjourned until noon ET on Thursday.
The special purpose acquisition company had a Thursday deadline to take Trump’s media company and its Truth Social platform public. The SPAC has previously warned that a failure to extend the merger deadline could force DWAC to liquidate.
Adding to the intrigue, Digital World also submitted a securities filing Tuesday that highlighted one of Trump’s recent “Truths” on his Truth Social platform, which cast more doubt on the SPAC deal.
The former US President announced his intention to create a new social media platform after he was banned from Facebook and Twitter last year.
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“In any event, I don’t need financing, ‘I’m really rich!'” Trump posted on Saturday. “Private company anyone???”
DWAC’s shares plunged Tuesday after Reuters reported earlier Tuesday that it failed to get enough shareholder votes to extend the deadline for its merger with Trump Media and Technology Group. The merger would give Trump’s company a cash infusion. Trump created Truth Social after he was banned from Twitter following the Jan. 6, 2021, Capitol riot.
Trump Media denied reports of financial strife that surfaced at the end of August. Trump Media and Technology Group told CNBC in a statement that Truth Social is continuing to grow and is bolstered by the recent addition of advertising to the platform.
“TMTG will continue cooperating with all stakeholders in connection with its planned merger, and hopes the SEC staff will expeditiously conclude its review free from political interference,” a spokesperson from the company wrote to CNBC.
DWAC warned investors that Trump’s volatile popularity could be a risk to the deal. The former president is also currently the subject of various investigations, including a probe into the removal of sensitive documents from the White House. Both DWAC and Trump Media are also under federal investigation for possible securities violations.
DWAC needed 65% of shareholders to approve the extension. CEO Patrick Orlando says he controls 20% of shares through his ARC Investments but that many of the SPAC’s shareholders are retail investors.
Orlando has been on a media campaign and posting on Truth Social to drum up enough votes for the extension. DWAC is still trading above its liquidation price, which would pay out around $10 per share. There could be hope in “built in” extensions that Orlando has previously alluded to. Such an extension would require sponsors to add more cash to the company’s trust.