Digital World Acquisition Corp and Trump Media and Technology Group have been set to merge since October 2021. The deal would provide TMTG–which is led by Trump loyalist Devin Nunes and owns Truth Social–with up to $1.3 billion in capital and make them a public trading entity. But the bride and groom may be limping into their wedding.
On the 19th of March, Digital World fired their chairman and CEO Patrick Orlando, though he retained his role as company director. Orlando was the architect of the merger.
“Due to the unprecedented headwinds faced by the company, the board agreed it was in the best interest of its shareholders to select a new management team to execute an orderly succession plan and set strategic operating procedures for the company in this new phase,” DWAC said in a statement. “Mr. Orlando’s departure enables the board to appoint new leadership, which it believes will restore confidence to the shareholders.”
Orlando’s vision has been delayed and disrupted by two federal investigations. One is looking at whether merger talks between Digital World and Trump Media violated federal securities laws. The other is examining a group of Orlando-aligned early investors in Digital World engaged in improper trading.
Because Orlando was the most frequent contact with Trump reps, Digital World was hoping that his ouster as chief executive would pacify investigators and perhaps put the merger into a more favorable position, said one of the people briefed on the matter.
If the merger is not done in the next six months, Digital World will be forced to return the approximately $300 million it raised from investors in 2021 via a public offering. It remains unclear if the activities by the Securities and Exchange Commission and federal prosecutors in Manhattan will be completed quickly enough to permit the SEC to approve the merger on September 8th. Execs from TMTG and some DWAC shareholders are saying that the SEC is just biding their time. In fact, a February letter from Trump officials urged some Congressional Republicans to open an investigation into the SEC’s reluctance to approve the deal over anti-Trump bias.
Tangential to all of this is the fact that former President Trump has been indicted by a Manhattan grand jury over hush money payments made to adult film actress Stormy Daniels during the 2016 campaign. Amazingly, the indictment actually boosted DWAC’s shares almost 9%. To be fair, the stock is very attuned to what happens to Trump and others involved in the media, such as Elon Musk.
Without the DWAC deal, TMTG will have to find some cash elsewhere. And the timing couldn’t be worse, as the 2024 campaign for Trump is going to move into high gear sooner rather than later, as well as his potential arrest. So far, TMTG has been paying its bills via their funding leftovers and ad revenue.
It looks like there could be no dowry in sight for Trump’s team.
