Trump-linked SPAC adjourns shareholder meeting until October as it seeks votes to delay merger

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This illustration photo shows Donald Trump’s new social media app Truth Social, glitching on a smartphone in Los Angeles, February 21, 2022.
Chris Delmas | AFP | Getty Images

Digital World Acquisition Corp., the SPAC aiming to take former President Donald Trump’s media company public, adjourned its shareholder meeting until Oct. 10 to allow voting to continue on delaying the merger.

DWAC had already twice adjourned the meeting earlier in the day after previously adjourning it Tuesday. The deadline for the merger was set for Thursday. The vote could decide the fate of a $1.3 billion cash infusion from DWAC’s public offering and Trump Media and Technology Group’s potential listing on the stock market.

DWAC confirmed Thursday that ARC Global Investments II, a company controlled by DWAC CEO Patrick Orlando, initiated a built-in, three-month extension by depositing $2.8 million into DWAC’s trust account.

The deposit, equivalent to 10 cents per share, pushes the merger deadline to Dec. 8, around two months after the next scheduled special meeting. Given the extra time, DWAC ended its statement by rallying investors to vote in favor of the extension.

Following the Thursday adjournment, Orlando posted to Truth Social a reference to “Star Trek” along with a photo of a tomahawk steak, a selfie with a white Ford Bronco as well as quotes from Trump and Thomas Jefferson.

Shares of DWAC seesawed on light volume after the market closed.

Trump Media owns Truth Social, which was founded by the former president after he was banned from Twitter following the Jan. 6, 2021, Capitol riot.

Digital World had previously warned that the vote’s failure could result in the SPAC’s liquidation. The built-in extension buys the company some more time to gather votes and, if liquidation does occur, increases share payout from around $10.20 to around $10.30.

DWAC had been scheduled to announce the vote results Tuesday, but Orlando adjourned its special meeting after just two minutes to provide more times for voting. Earlier that day, Reuters had reported that DWAC had failed to garner the votes necessary for the extension, citing sources familiar with the matter.

DWAC needs 65% of shareholders to support the extension of the merger deadline. While 20% of those shares are held by Orlando through ARC Global Investments, he says the deal has attracted many retail investors. Orlando has been rallying those investors to vote on Truth Social.

The deal has also been the subject of an SEC probe into potential securities violations, stemming from reports that representatives from Trump Media and DWAC discussed the merger prior to DWAC’s public offering.

Trump Media and Technology Group blamed the SEC for the merger delay, alleging that “meaningful feedback” from the commission is long overdue.

“In the interests of simple fairness, the SEC needs to set aside any improper political considerations and bring its review to a swift conclusion,” a statement from Trump Media read.

CNBC reached out to the SEC for comment Thursday.

Trump Media has denied reports of financial strife that alleged that the company owed over $1 million to a contractor. The former president has indicated that company may not need the cash infusion from the DWAC deal.

“In any event, I don’t need financing, ‘I’m really rich!’ Private company anyone???” Trump wrote in a Truth Social post on Saturday.

Sophie Tremblay

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