A highly anticipated merger between the previous administration’s media company and a blank-check company has been granted an extension just in the nick of time to avoid liquidation, according to reports.
Shareholders of Digital World Acquisition Corp. (DWAC) have approved a one-year extension for the merger deadline between the two companies, as reported by the New York Times and Washington Post. Without this extension, DWAC would have faced liquidation on September 8.
DWAC, a special purpose acquisition company (SPAC), and Trump Media & Technology Group, the operator of Truth Social, former President Donald Trump’s social media platform, have not responded to CBS News’ requests for comment. DWAC shares, which were valued at $175 in 2021 shortly after the company’s initial public offering, increased by 3.9% to $17.16 during afternoon trading.
“We appreciate the tremendous support,” stated DWAC CEO Eric Swider in a Truth Social post on Tuesday morning. “Please understand our need for confidentiality. We are fully committed to our mission and carefully monitoring our communications.”
The merger between Trump Media & Technology Group and DWAC has encountered numerous obstacles. Since its announcement in 2021, the pending merger has faced setbacks. The news of the merger initially caused a surge in the company’s stock value due to expectations that Truth Social and other Trump-affiliated media ventures would prosper by offering a conservative-oriented social media service.
A Challenging Path
However, the road to completing the merger has been filled with challenges. DWAC recently settled fraud charges with the Securities and Exchange Commission, and the company now faces the possibility of being removed from the Nasdaq stock exchange if it fails to submit its quarterly report on time.
Throughout this journey, DWAC has postponed the merger, seeking support from shareholders to extend the deal’s closing while undergoing reviews from both the SEC and the Department of Justice.
These delays led to the current deadline to convince DWAC’s shareholders to approve yet another extension. Without this approval, the blank-check company would have been forced to liquidate and return the $300 million raised in its initial public offering to shareholders by September 8, which would have effectively terminated the merger and deprived Trump Media & Technology Group of the capital.
According to reports from the Times and Washington Post, the extension grants DWAC an additional 12 months to finalize the merger with Trump’s company.
On Truth Social, Republican Representative Dan Meuser of Pennsylvania expressed optimism about the merger extension, calling it “an encouraging development.” He further urged the SEC to expedite its review process and stop delaying the merger, emphasizing that investors have shown strong confidence in the future of Truth Social.
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