Trump Media's funding partner gets reprieve only days before possible liquidation
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A long-delayed merger between former President Donald Trump's media company and a so-called blank-check company has received a reprieve just days before the latter company faced liquidation, according to reports.
Shareholders in Digital World Acquisition Corp. (DWAC) approved a one-year extension of the merger deadline between the two companies, according to the New York Times and Washington Post. Without that extension, DWAC would have faced liquidation on September 8.
DWAC, a special purpose acquisition company, or SPAC, and Trump Media & Technology Group, which operates Trump's social media platform, Truth Social, didn't return requests for comment from CBS News. DWAC shares, which traded for $175 in 2021 shortly after the company's initial public offering, rose 3.9% in afternoon trading to $17.16.
"Thank you for all the outstanding support," wrote DWAC CEO Eric Swider in a Truth Social post on Tuesday morning. "Please understand my silence. We remain focused on the task at hand and are watching every word we say."
The art of the deal has proved elusive for Trump Media & Technology Group and DWAC. The pending merger has been in the works since 2021, when DWAC announced it would combine with Trump Media, sending the company's stock surging on expectations that Truth Social and other Trump-affiliated media properties could profit by providing a conservative-flavored social media service.
Bumpy road
Since then, the road to completing the merger has been rocky. DWAC this summer settled charges of fraud with the Securities and Exchange Commission, while the company now faces the threat of its shares being delisted from the Nasdaq stock exchange because it has failed to file its quarterly report on a timely basis.
Along the way, DWAC postponed the merger, asking shareholders to support extensions for closing the deal as it faces reviews from both the SEC and the Department of Justice.
Those delays culminated in this week's deadline to convince DWAC's shareholders to approve another merger extension. Without that approval, the blank-check company would have faced the prospect of liquidating and returning $300 million raised in its IPO to its shareholders by September 8, effectively quashing the merger and depriving Trump Media & Technology Group of those capital.
The extension will give DWAC another 12 months to complete the merger with Trump's company, the Times and Washington Post reported.
On Truth Social, Rep. Dan Meuser, a Republican from Pennsylvania, called the merger extension "a positive sign." He added, "I once again call on the SEC to expedite the review process and stop delaying the merger after investors doubled down on the future of Truth Social."
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