Investors Abandon SPAC Merging With Trump's Floundering Media Firm

Investors are backing out of Digital World Acquisition Corp.'s plan to acquire former U.S. President Donald Trump's social media firm Truth Social, the blank-check firm said, Akash Sriram and Nivedita Balu reported for Reuters.

Photo Insert: The deal between the special purpose acquisition company (SPAC) and Trump Media and Technology Group (TMTG), which owns Truth Social, has been on ice due to civil and criminal probes into the circumstances around the deal.

Digital World said it had received termination notices from private investment in public equity (PIPE) investors ending nearly $139 million in investments out of the $1 billion commitment it had previously announced, meaning 13.9% of the money will be out reach of Trump, who is sinking deeper into criminal investigations and indictment for civil fraud in New York state.

Investors, who signed the PIPE commitment about one year ago, are free to move their money after the Sept. 20, 2022 deadline if the deal has not completed. Digital World did not disclose the investors that pulled out.

Sources told Reuters Sabby Management, which had committed $100 million to the PIPE, is one of the investors who have terminated, Svea Herbst-Bayliss and Krystal Hu also reported for Reuters.

More investors could pull out in the next few weeks, sources said, as they can terminate any time after the deadline. Many are waiting for DWAC to propose more preferred terms to PIPE investors.

The deal between the special purpose acquisition company (SPAC) and Trump Media and Technology Group (TMTG), which owns Truth Social, has been on ice due to civil and criminal probes into the circumstances around the deal.

The SPAC had hoped the US Securities and Exchange Commission (SEC), which is reviewing Digital World's disclosures on the deal, would have given its blessing by now.

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