Digital World fails again to gain enough votes to extend Truth Social merger

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Former President Donald Trump has failed to win another vote — this time from the shareholders of an investment ally his social network Truth Social had counted on for money.

Digital World Acquisition, a special-purpose acquisition company, said Thursday it had not yet received enough shareholder votes to extend the deadline for merging with Trump’s start-up — a necessary step to unlock $1.3 billion in funds raised.

The company would be liquidated on Thursday unless investors approved the extension or paid the company’s sponsor to push the deadline itself.

But Digital World chief Patrick Orlando said late Thursday that the company would instead postpone a much-anticipated meeting until October 10 without giving further details, indicating the company was still scrambling to get enough shareholder support. to collect.

The company has said in filings that Arc Capital, the Shanghai-based investment consultancy that funds and sponsors Digital World, could pay $2.8 million to give the company another three months to close the deal without approval from the government. shareholders.

Even that may not be enough time. Ongoing investigations by the Securities and Exchange Commission and federal prosecutors have indefinitely frozen the merger. In an SEC filing on Wednesday, Digital World reprinted an entry from a pro-Trump blog urging the SEC to “conclude its investigation.”

Digital World’s charter then gives its executives a further three-month extension, at a similar cost, to finalize the deal. If the merger is still not complete by then, Digital World has said it could be forced to liquidate, return all of its money to investors and leave Trump’s operation with nothing.

The loss once again casts doubt on the main financier of Trump’s business ventures after the presidency. Digital World has long been touted as Truth Social’s central source of funding, and there’s no obvious financial alternative once that money goes away.

Trump’s company said it is working on selling ads on Truth Social but has not yet reported any revenue. In May, Digital World said in an SEC filing that Trump’s company has run out of loans, including $15 million in bridge funding from earlier this year, which could allow it to pay its bills through at least April 2023.

Trump has tried to downplay the issue by posting to Truth Social this weekend, “I don’t need funding, ‘I’m really rich!’” But the company is already facing a dispute with a conservative online services company over allegedly unpaid bills.

Trump’s Truth Social Steps Closer to a Financial Cliff

Digital World needed 65 percent of its shareholders to vote to give the deal another year. But not voted enough, Orlando said.

Orlando and other investors had campaigned heavily in recent days to gain enough shareholder support, including on Truth Social, a Twitter clone that had suffered technical issues and little activity in the six months since its launch.

“We’re in the midst of this potentially historic mood, and I just want to make sure that everyone is re-truing, quote-truing, following each other and making sure no DWAC shareholders are left behind,” Orlando said. in a Truth Social video last week, using the platform’s words for “retweet” and “quote tweet.”

The meeting was originally scheduled for Tuesday, but was postponed to allow the company to record more votes, Orlando said. On Thursday, the meeting was postponed two more times before Orlando spoke at 5 p.m., saying the meeting would be postponed again until October 10.

Digital World’s share price rose about 1 percent to $23 on Thursday, falling in after-hours trading following the postponement. It is down nearly 90% from its peak, of $175, shortly after its market debut.

Shortly before the meeting was adjourned, Orlando wrote on Truth Social that “important information” would be circulated on the site later Thursday. Some on the site were concerned about the move. “This is not good. They should have at least answered questions,” wrote one user.

The disastrous launch of Trump’s Truth Social raises doubts about its long-term viability

Truth Social has become Trump’s main internet megaphone, even though his audience there is about 95 percent smaller than the Twitter he gained before he lost the White House.

Trump was banned from all major social networks after his supporters stormed the US Capitol over his false allegations of voter fraud on January 6, 2021.

Truth Social has other things to worry about besides its financial survival. Google told Trump’s company last month that it would not let Truth Social go live on its Android app store until it could demonstrate that it effectively moderated posts on the site, including removing physical threats and incitement to violence, a Google reported. spokesperson to The Washington Post. Both companies have said they are working on the issue.

Google sent its notice to the company about a week after an armored gunman attempted to breach an FBI field office in Cincinnati, an agency Trump has routinely defamed. Ricky Shiffer, the suspect killed in a gunfight according to police, was a prolific user of Truth Social and urged his followers to “kill [FBI agents] insight.”

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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