The company seeking to acquire the social media site needs shareholder approval to extend the time to complete the deal. The results of the vote are to be announced on Tuesday.
The cash-rich company that seeks to merge with former President Donald J. Trump’s social media company is facing a looming deadline and is asking shareholders to give it more time to complete the deal.
Digital World Acquisition Corporation, a so-called special purpose acquisition company, or SPAC, has given shareholders until Tuesday to decide whether to give it another year to complete the merger with Trump Media & Technology Group.
Digital World, which went public a year ago, had originally given itself until Sept. 8 to complete a merger with a company or return the hundreds of millions raised in its initial public offering to investors. Dual investigations by federal prosecutors and securities regulators into the deal have bogged down the merger and led to the delay.
The outcome of shareholder vote is expected to be announced at a special meeting on Tuesday. If Digital World does not get at least 65 percent of shareholders to approve the extension, the company has the option of adjourning the meeting to allow it more time to gather additional “yes” votes.
If Digital World’s shareholders do not approve the one-year extension, the SPAC will be forced to liquidate and return to investors the roughly $300 million it raised last September. A liquidation would leave Trump Media and its upstart social media platform, Truth Social, searching for a new business partner.
- 1 What to Know About the Trump Investigations
- 2 What to Know About the Trump Investigations
- 3 What to Know About the Trump Investigations
- 4 What to Know About the Trump Investigations
- 5 What to Know About the Trump Investigations
- 6 What to Know About the Trump Investigations
- 7 What to Know About the Trump Investigations
- 8 Read More on the Trump Investigations
What to Know About the Trump Investigations
What to Know About the Trump Investigations
Numerous inquiries. Since former President Donald J. Trump left office, he has been facing several civil and criminal investigations into his business dealings and political activities. Here is a look at some notable cases:
Over the weekend, Mr. Trump, in a post on Truth Social, suggested that he’d be all right if the deal with Digital World failed: “I don’t need financing, ‘I’m really rich!’ Private company anyone???”
In the run-up to the special meeting, Digital World embarked on an aggressive campaign to get out the votes, with a special appeal to the many retail investors who bought shares after the I.P.O. to show support for the former president.
Patrick Orlando, chief executive officer of Digital World and the SPAC’s primary promoter, gave a number of interviews on various social media platforms — including Truth Social — urging the many retail investors to vote. In one appearance, a Christian musician began by invoking a prayer to bless Mr. Orlando in his quest to get the extension approved.
Mr. Orlando has posted often on Truth Social, sometimes wearing a “Truth” baseball cap, telling investors how to cast a vote for the extension. Mr. Orlando did not respond to requests for comment.
Trump Media started Truth Social as an alternative to Twitter after Twitter banned Mr. Trump in the wake of the Jan. 6, 2021, attack on the Capitol by thousands of his supporters.
Digital World can adjourn the meeting for a few days to gather the votes. But if the sponsors of the SPAC want to unilaterally extend the deadline by three months or more, they will have to deposit several million dollars into the special bank account that holds the money raised in the I.P.O., according to a regulatory filing.
Even with a one-year extension, many hurdles remain for any deal between Trump Media and Digital World.
The biggest is the ongoing investigations by the Securities and Exchange Commission and federal prosecutors into potentially improper communications between representatives of Digital World and Trump Media before Digital World’s I.PO., and the unusual trading in Digital World securities before the merger announcement last October.
Read More on the Trump Investigations
Key developments in the inquiries into the former president and his allies.
- Special Master: A judge granted former President Donald J. Trump’s request for an independent arbiter to review the files seized from Mar-a-Lago. The ruling could lead to appeals and delay the inquiry.
- The ‘60-Day Rule’: As midterms near, the Justice Department is weighing whether to temporarily scale back the criminal investigations involving Mr. Trump because of an unwritten rule forbidding overt actions that could improperly influence the vote.
- Lindsey Graham: A judge ruled that the Republican senator, who has been fighting efforts to force him to testify in the Georgia election interference inquiry, can be questioned about certain parts of his calls with Georgia’s secretary of state.
Also, there is no guarantee the three dozen hedge funds that committed last year to provide $1 billion in financing if the deal closes will agree to a similar extension.
Without the cash infusion from Digital World, Trump Media may need to raise additional financing.
To date, Trump Media has raised about $37 million in financing from unnamed investors, including $15 million this year. But it is unclear how much money Trump Media has been spending to operate Truth Social since it started in February.
The social media site has grown slowly. Truth Social ranks 124th among apps downloaded by iPhone users, according to data tracking firm SensorTower.
Its future growth could be hampered by Google’s decision not to distribute Truth Social on its app store until Trump Media removes content that incites violence.
Digital World is trading around $25 a share, well off the $97 a share high-water mark in March.