The shell company Digital World Acquisition Corp. looking to merge with former President Donald Trump’s social media company announced late Wednesday that it had postponed a crucial meeting of shareholders slated for Thursday, which many hoped would bring about an extended merger deadline.
DWAC shares sank 7.8% after delaying the meeting.
The company now is giving shareholders until September 5th to approve the extension measure to complete the deal with Trump Media & Technology Group. That is just three days before the company would be forced to begin to liquidate and return the $300 million it raised from investors.
Digital World was set up as a special purpose acquisition vehicle, or SPAC, which raises money by going public to finance a future merger. Its destiny was always to merge with Trump Media. The merger was announced on October 21st, 2021, and Digital World now is trying to get 65% of its approximately 400,000 shareholders to approve the extension for the deal.
Earlier this summer Digital World reached a settlement with the Securities and Exchange Commission to resolve an investigation into events preceding the original merger announcement. Digital World’s settlement requires it to pay a penalty of $18 million once the merger is completed and to revise some of its filings to comply with the law.
If the Digital World merger is completed, it will provide Trump Media, the parent company of Truth Social, with a badly needed source of cash.