Trump's Truth Social May Shutter As Partner Loses Stockholder Backing

The blank-check acquisition firm that agreed to merge with Donald Trump's social media company failed to secure enough shareholder support for a one-year extension to complete the deal, people familiar with the matter said, Svea Herbst-Bayliss reported for Reuters.

Photo Insert: At stake is a $1.3 billion cash infusion that Trump Media & Technology Group, which operates the former US president's Truth Social app.

At stake is a $1.3 billion cash infusion that Trump Media & Technology Group, which operates the former US president's Truth Social app, stands to receive from Digital World Acquisition Corp., the special purpose acquisition company (SPAC) that inked a deal last October to take TMTG public.

Without DWAC stockholder backing, TMTG will be forced to shutter.

The transaction has been on ice amid civil and criminal probes into the circumstances around the deal. Digital World had been hoping that the US Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal, would have given its blessing by now for the transaction to proceed.

Most of Digital World's shareholders are individual investors and getting them to vote through their brokers has been challenging, Digital World Chief Executive Patrick Orlando said last week.

Digital World needs 65% of its shareholders to vote in favor of the proposal to extend its life by 12 months for the move to become effective. By Monday evening, far fewer Digital World shareholders than those required had voted in favor, the sources said.

The outcome of the vote is set to be announced at a special meeting of Digital World shareholders on Tuesday. Digital World executives do not believe they will be able to muster enough shareholder support in time and have started to consider alternative options, according to the sources.

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