Shares in Digital World Acquisition Corp., the blank-check firm set to merge with Donald Trump’s social media company, tumbled after a report said it failed to get enough support for an extension to complete the deal.
(Bloomberg) — Shares in Digital World Acquisition Corp., the blank-check firm set to merge with Donald Trump’s social media company, tumbled after a report said it failed to get enough support for an extension to complete the deal.
Executives at the special purpose acquisition company don’t expect to get enough shareholder support for a one-year extension to complete a deal with Trump Media & Technology Group, Reuters reported, citing people familiar with the matter. The shares fell as much as 33% in US premarket trading, and are set to open at the lowest since the deal was announced last year.
The company — which needs 65% of shareholders to support the extension — is now weighing delaying the vote deadline among other options, Reuters said. The result of the vote is due to be announced Tuesday.
Digital World shares soared to $175 after the merger with the former President’s company was announced in October, becoming a favorite among retail traders and Trump supporters. The launch of Trump’s social media site, Truth Social, in February, was a further boost, before disappointing downloads for the platform as well as regulatory issues facing Digital World weighed on the shares. They closed at $25 on Monday.
The blank-check firm said in July that a federal grand jury is seeking information from Trump Media & Technology Group about the planned deal, while the Securities and Exchange Commission issued a subpoena for similar information the same week. Digital World said at the time that the grand jury is also seeking information from certain current and former TMTG personnel.
The SPAC was trading 22% lower at $19.50 as of 7am in New York.
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