Digital World Acquisition rescheduled a shareholder vote on a deadline extension to Sept. 8 at noon. The proposal calls for up to four three-month extensions until no later than September 2023 for the SPAC to complete a merger with Trump Media & Technology Group. Yesterday’s meeting, when shareholders were expected to vote on the matter, reportedly lasted about two minutes before an adjournment was called.
In connection with the adjourned date, the SPAC also extended the redemption deadline until today at 5 p.m.
If the extension is not approved tomorrow, the SPAC’s sponsor ARC Global Investments II intends to contribute $2.875 million (10 cents a share) into Digital World’s trust for an automatic three-month extension, the SPAC said in a press release. Up to two such extensions are allowed under the SPAC’s bylaws, provided the sponsor adds cash to the trust.
Digital World sought a deadline extension when it appeared likely that federal investigations into the SPAC and Trump’s media company would likely delay the merger deadline, which is tomorrow. The SPAC also stands to lose PIPE funding of about $1 billion if the deal doesn’t close by Sept. 20, at which time PIPE investors can walk away.
Digital World CEO Patrick Orlando in an interview last week noted that a majority of the SPAC’s shareholders are retail investors. That historically presents a challenge in drumming up turnout for a proxy vote, he said. Institutional investors typically vote large blocs of stock in a proxy and are experienced in the process. Retail investors may not be as familiar with the mechanisms of a proxy vote, if they are even inclined to vote at all.
Digital World needs at least 65% of eligible shares to vote in favor of the extension for it to pass.
Posting on his social media platform, Truth Social, Trump has accused the SEC of trying to harm the SPAC deal and suggested he didn’t need it, anyway, writing, “I’m really rich!” while hinting about keeping Trump Media a private company and claiming he doesn’t need financing.
There has been no indication that Trump has invested any of his own money either into his media company or Digital World Acquisition.
Meanwhile, Truth Social allegedly owes $1.6 million in unpaid hosting fees, according to Fox News reporting. Read more.
