After returning to Elon Musk's X social media platform, Trump had raised gigantic question marks over the entire raison d'être behind Truth Social and, by extension, the planned public flotation of the Trump Media and Technology Group (TMTG) via a reverse merger with the SPAC Digital World (NASDAQ: DWAC). Now, following inordinate delays in consummating its planned merger amid an onslaught of federal investigations, Digital World has won another extension in its merger deadline, placing TMTG's public flotation on a back-burner.
Deadline: $DWAC investors have until 10am EST today to vote to extend the merger deadline with TMTG. A failed vote would see Digital World returning $10.24 per share to investors
— TMTG (@TMTGcorp) September 5, 2023
For the benefit of those who might not be aware, the Trump Media and Technology Group is the parent entity of Truth Social, Donald Trump's bespoke social media platform. As mandated by its articles of incorporation, Digital World had to consummate a merger by the 08th of September or face certain disbandment. As such, the SPAC convened a special meeting of its shareholders on the 05th of September to seek another extension in its merger deadline, given the impossibility of concluding its merger agreement with TMTG by the 08th of September.
Congrats $DWAC investors! pic.twitter.com/yAzDfuShq2
— Peter Brooks (@realPeterBrooks) September 5, 2023
This brings us to the crux of the matter. Digital World investors have now extended the merger consummation deadline by a period of one year, giving enough time for the two entities to resolve their legal hurdles, thereby creating a much more conducive environment for a successful public flotation.
Digital World shares are recording decent gains today, with the stock last up around 4 percent. Year to date, the stock is up a little under 10 percent.
It was only recently that Digital World reached a settlement with the SEC for misleading investors by failing to disclose a number of merger-related preliminary discussions with TMTG as well as other investors in the spring and summer of 2021.
Meanwhile, Trump's legal travails keep mounting, with the former US President now facing four different lawsuits: hush money, classified documents case, 2020 elections interference, and Fulton County.
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