Donald Trump’s Media Company Faces Setback As SPAC Seeks Approval To Extend Time To Complete Deal

·3 min read

The special purpose acquisition vehicle backing the parent company of Donald Trump’s social media platform may need to call it quits after it has yet to garner enough shareholder support for an extension that would give the deal more time to close.

Shares of Digital World Acquisition Corp., traded on the Nasdaq, are down 17%.

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At a special shareholder meeting on Tuesday, CEO Patrick Orlando pushed back a deadline until noon on Thursday for a vote on extending the term of the SPAC, something that will give it more time to complete the deal to merge with Trump Media and Technology Group. If 65% of shareholders don’t approve the extra time Orlando is requesting, the SPAC may be forced to liquidate, delivering a setback to the financial plans for Trump’s company.

SPACs are also called “blank check” companies that go public, raise cash and search for something to buy, taking the target public in the process without the need for a formal IPO. They must compete a transaction within a given timeframe.

But the TMTG deal, announced last year, has been slowed by a federal probe and amid reported financial difficulties. The Truth Social app was recently barred from the Google Play store for violating content moderation policies. It’s still available on the Apple App Store and online. Trump is the middle of a high-profile legal battle with the DOJ over classified government papers he moved with him to Mar-a-Lago.

Orlando owns 20% of the SPAC shares but there are a few other institutions as well as a large cadre of retail investors. He’s has been pleading with them all for a yes vote on extra time. “We’ve had some delays. This is a deal with a lot of attention on it. It’s slower than expected but we’re fighting every single day, working every single day to advance the ball.,” he said recently. “And this is where we need stockholders to come in and have their votes counted.”

TMTG bills itself is a social media and technology company, with Trump’s Truth Social as “a Big Tech alternative that seeks to create a free-speech haven without viewpoint discrimination or oppressive censorship.”

Axios reported last week that Google has restricted Truth Social from its app store because of concerns over posts that include threats of violence.

The messages that Trump “re-Truthed” included ones that claimed that Joe Biden and the Democrats are out to destroy the country. One meme featured Vice President Kamala Harris, Biden and House Speaker Nancy Pelosi with the words “Your enemy … is not … in Russia” posted over their eyes.

The media watchdog group NewsGuard reported last month that Truth Social has verified 47 accounts that promote QAnon, and they all have more than 10,000 followers. They identified 88 users, verified and unverified, with more than 10,000 followers. More than one-third were accounts previously banned on Twitter. NewsGuard found that Trump had re-Truthed QAnon promoting accounts 65 times to his 3.8 million followers — but that was before his latest spree.

In response to the news about Google, Trump’s firm said in a statement, “TMTG has no desire to litigate its business matters in the public sphere, but for the record, has promptly responded to all inquiries from Google. It is our belief that all Americans should have access to Truth Social no matter what devices they use. We look forward to Google approving Truth Social at their earliest convenience.:”

A liquidation would entail returning about $300 million the SPAC raised.

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