Although formal confirmation is apparently unavailable as of Tuesday afternoon, Digital World Acquisition Corp. (DWAC), which is a so-called blank check company that previously announced an agreement to merge with the Trump Media & Technology Group (TMTG), was reportedly failing this week in its effort to obtain the level of shareholder support necessary for extending the deadline for the merger.
Reuters reported Monday that the number of shareholders who voted in favor of extending the deadline, which DWAC was hoping to push back by one year, was “far fewer” than the total required to make the change as of that evening, according to sources. Reuters reported at the time that DWAC executives were considering back-up plans including extending the deadline for the vote in an apparent effort to muster the level of support from shareholders necessary for instituting the 12-month extension. In the meantime, DWAC’s stock price is plummeting. By Tuesday afternoon, a one-day drop in value of around 16 percent was recorded, bringing the total loss over the past six months to about three-fourths of the value from the beginning of that period. The company was at over $83 a share on March 7, and now, it’s around $20 or $21 — showing a drastic fall.
Trump supporters likely comprise a significant portion of those who invested in DWAC. Rep. Marjorie Taylor Greene (R-Ga.) previously put money into the company, and she’s presumably far from alone in doing so among the ex-president’s fervent supporters. At DWAC, the final outcome of the extension push remains unclear clear as of Tuesday, but available information doesn’t suggest an overwhelmingly positive turn. Reuters reported that announcing the final outcome of the vote on extending the deadline for the merger was set for a Tuesday shareholders meeting, but the company evidently adjourned that meeting after some two minutes and indicated it would keep tabulating votes, per CNBC’s reporting. CNBC reported an expectation of the final outcome officially emerging Thursday.
DWAC is facing the possibility of liquidation if efforts at extending the deadline for the merger with Trump’s company prove unsuccessful, according to the special purpose acquisition company’s own warnings. If DWAC and the planned merger with the Trump-branded company fall apart, the Trump Media & Technology Group could lose out, at least for now, on massive amounts of funding, including hundreds of millions that DWAC already holds and $1 billion in pledges. Agreements underlying the latter tranche of funding are actually set to expire in the near future if the merger isn’t finalized. According to Reuters, investment bankers connected to DWAC were recently working on potentially extending that arrangement as well. The arrangement for DWAC and TMTG — which is behind Truth Social — to merge is apparently waiting on approval from regulators at the Securities and Exchange Commission. The agency is also investigating whether negotiations between TMTG and DWAC about the merger took place before the latter went public, which would violate federal rules.