Donald Trump’s plan to take his media business public is in jeopardy after shareholders failed to approve a motion that would allow a blank-cheque acquisition company to keep pursuing a deal with the former president in the face of scrutiny from federal prosecutors.
Executives of Digital World Acquisition Corporation had until Thursday to complete the deal, which had been expected to generate proceeds of at least $1bn for Trump Media and Technology Group.
The transaction would also result in a stock market listing for the nascent venture, which launched as a “non-woke” social media platform in February with the intention of challenging industry players such as Twitter.
Unable to meet the September 8 deadline — and facing investigations by the Securities and Exchange Commission and the Department of Justice that executives have said would probably cause delays — Digital World Acquisition faced having to wind itself up and give its cash back to shareholders. They would receive little more than the $10 per share they invested in the initial public offering a year ago.
That would be a money-losing outcome for stockholders whose shares were worth $23.35 apiece as the market closed on Thursday. To forestall such a prospect, the company last month asked shareholders for a 12- month extension that would allow executives to continue pursuing the Trump deal.
With time running out to secure investor backing, Digital World Acquisition chief executive Patrick Orlando this week sought to rally its base of retail investors to approve the extension. He sat for an interview with Christian worship leader Chad Nedohin that began with a prayer thanking Jesus Christ for “blessing this investment”.
But as the deadline expired on Thursday, it appeared that Digital World Acquisition had not secured approval from a required 65 per cent of shareholders. A shareholder meeting at midday was adjourned to 3pm with no result announced. Finally, at 5pm, the company adjourned proceedings until October.
In a last-ditch effort to keep the deal’s prospects alive, Digital World Acquisition’s backers used an alternative mechanism to loan the company $2.9mn of their own money to secure a three-month extension, which they hope will allow them to win shareholder support for the longer reprieve.
US authorities have not spoken publicly about their investigations, and no person or company has been accused of any wrongdoing in connection with the Trump deal.
TMTG has recently dismissed claims that it is struggling financially following reports that it is running out of money. In a post on Truth Social this month, Trump said his business is “doing really well”.
He also said regulators are “trying to hurt” Digital World Acquisition and claimed he does not need the deal to go through. “In any event, I don’t need financing, ‘I’m really rich!’ Private company anyone???” he wrote.