Talks to Merge Trump’s Truth Social With Blank Check Firm Given Extension

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The long-stalled talks to merge former president Donald Trump’s Truth Social with a blank check firm have received a reprieve. Shareholders of Digital World Acquisition Corp. (DWAC) voted to extend the negotiation deadline for another year, allowing the merger with Trump Media and Technology Group to proceed.

DWAC, which announced its plans in 2021 to merge with Trump’s media company and take it public, was at risk of canceling the deal and liquidating if shareholders did not grant an extension. The future of Trump’s media company was uncertain, with recent layoffs due to the stalled negotiations.

In a last-ditch effort, DWAC had been actively lobbying its shareholders to extend the deadline. Their efforts paid off as shareholders approved the 12-month extension, according to the Wall Street Journal.

Representatives for DWAC and Trump’s media group have not yet responded to requests for comment.

Finalizing the deal, which involves injecting $300 million of DWAC’s funds into Trump’s media company, has faced numerous hurdles over the past two years. DWAC, without any existing operations, would have been required to return the $300 million raised in its initial public offering if a transaction couldn’t be completed within two years.

The extension provides a lifeline for the merger discussions, keeping hope alive for the realization of Trump’s Truth Social platform.

DWAC Settles Fraud Charges with SEC Alleging Misleading Investors

In a recent settlement with the Securities and Exchange Commission (SEC) in July, DWAC acknowledged fraud charges that accused the company of deceiving investors in the deal.

DWAC and SPAC: A connection explained

A Special Purpose Acquisition Company (SPAC) is usually established as an empty shell company that aims to raise funds for future acquisitions after it goes public. Typically, the company identifies its merger target after successfully securing investments and entering the public market.

SEC’s Allegations Against DWAC

According to the SEC, DWAC executives engaged in extensive merger discussions with Trump Media and Technology Group Corp. without disclosing it to their investors during the fundraising stage.

Commitment to Finalizing the Deal

Despite the allegations, both DWAC and Trump Media and Technology Group Corp. released statements in August reaffirming their commitment to completing the deal. Two weeks ago, DWAC executives requested an extension to the negotiations deadline, emphasizing that without it, the deal would likely fall through.

DWAC’s CEO Shares Optimism

In late August, Eric Swider, the CEO of DWAC, expressed confidence in the value and potential of the proposed business combination with Trump Media and Technology Group Corp. He conveyed his belief in a true democracy in the United States and the ongoing support of shareholders, highlighting their ability to overcome this challenge and successfully navigate the deal.

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