Investors In SPAC For Truth Social Quitting, Dumping Trump

The embattled partnership between Donald Trump's social media start-up and the company behind the SPAC that would take it public is on the verge of falling apart for good as potential investors either renege on their plans to fund it or demand a bigger return on their investment, Tom Boggioni reported for Raw Story.

Photo Insert: With a cloud hanging over it due to an SEC investigation and the company's inability to pay its bills, investment analysts are waving the red flag.

At issue is the proposed deal that was supposed to inject over a billion dollars into the increasingly troubled start-up before it went public -- which now may collapse under its own weight. Already, one group of investors have withdrawn nearly $140 million of its investments.

As Politico's Declan Harty reports, investors sensing weakness now want a bigger slice of the pie if they are expected to park their money in a business deal that has been struggling since its inception.

"The group of more than three dozen investors who had planned to put $1 billion into the company have begun to waver as bad news keeps piling up around the deal," Harty wrote.

"The hedge funds, trading firms, and other major backers are questioning whether the financial riches that first attracted them to the transaction are still strong enough to hold their interest in a deal fraught with troubles, according to four investors who asked not to be named. Negotiations have been ongoing as some investors seek bigger potential profits in exchange for following through on commitments to put hundreds of millions of dollars into the venture."

With a cloud hanging over it due to an SEC investigation and the company's inability to pay its bills, investment analysts are waving the red flag. According to Kristi Marvin, of data research company SPACInsider, "this deal has taken more left turns than a doorknob. Now, it’s just got so much hair on it.”

Harty added: "Eleven months ago, Trump Media & Technology Group unveiled plans to merge with a company called Digital World Acquisition Corp. in a SPAC deal. At stake for Trump and his startup — the company behind conservative social media app Truth Social — is hundreds of millions of dollars, marking the latest blow to the former president’s business empire since he left office."

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