Truth Social SPAC Reportedly Fails To Gain Shareholder Toughen To Extend Acquisition

Truth Social SPAC Reportedly Fails To Gain Shareholder Toughen To Extend Acquisition


A query to elongate the closing date for the merger between outmoded President Donald Trump’s Truth Social platform and a particular cause acquisition firm couldn’t fetch shareholder give a boost to, Reuters reported, signaling more turmoil for the deal which also faces multiple federal investigations.

This illustration photo exhibits Donald Trump’s recent social media app Truth Social, glitching on a … [+] smartphone in Los Angeles.

AFP by Getty Shots

Key Facts

Digital World Acquisition Corp (DWAC)—the Nasdaq-listed smooth take a look at firm which has agreed to compose Truth Social’s mother or father firm Trump Media & Technology Team (TMTG) and spend it public—did now not garner the requisite 65% votes basically the most foremost to elongate the completion of the deal by an additional yr, Reuters reported, citing “of us conversant within the topic.”

The firm currently claimed the balloting job has been now not easy on legend of most of its shareholders are americans and their votes could well merely serene be secured by their brokers.

The firm has sought till September 8, 2023 to cease the deal, an extension beyond the long-established two-yr closing date—which expires on Thursday—all wherein a SPAC is required to cease an acquisition.

The final vote tally will seemingly be announced Tuesday, but Reuters reports that the firm’s executives are already exploring choices—which comprise a unilateral six-month extension without shareholder approval—as they suspect about they’ll fulfill the 65% threshold.

If DWAC fails to take care of the anguish earlier than Thursday’s September 8 closing date, this could perhaps presumably also be forced to liquidate its shares and return the cash it raised in its initial public offering.

Immense Quantity

18.86%. That’s how great DWAC shares luxuriate in plummeted within the past month amid reports of Truth Social failing to pay more than $1.6 million in bills to vendors.

Important Quote

In a Securities and Alternate Fee filing closing month, the firm talked about: “With out the Extension, the Board believes that there is foremost likelihood that we could well merely now not, despite our simplest efforts, be ready to cease the Substitute Mixture on or earlier than the Termination Date. If that luxuriate in been to happen, we…could well presumably be forced to liquidate.”

Key Background

The firm announced plans to gaze a one-yr extension from its shareholders closing month, pointing to in any case two federal probes into the planned acquisition. The SEC is investigating allegations that DWAC’s executives held talks with Truth Social’s mother or father firm earlier than the smooth take a look at firm went public. The alleged assembly could well presumably be in violation of laws that disallow SPACs from organising offers and merger agreements earlier than even going public. In a separate investigation, a federal fat jury in Unique York subpoenaed two contributors of DWAC’s board in June. The fat jury investigation has requested one of the most most a linked documents sought by the SEC alongside with data on communications with “multiple americans, and data relating to Rocket One Capital,” a Miami-based totally non-public equity firm.


After a bumper 2021, SPAC mergers luxuriate in confronted vital headwinds in 2022. In accordance with a CNBC tracker, firms that went public by SPAC mergers luxuriate in considered their values crater by more than 50% since the starting up of this yr.

Extra Reading

Irregular: Deal accomplice for Trump’s Truth Social fails to win backing for SPAC extension (Reuters)

DWAC Seeks To Extend Merger With Trump’s Truth Social Firm Amid Federal Investigations (Forbes)

Truth Social SPAC Down 9% As Trump Denies Reports Of Monetary Anguish (Forbes)