Shareholders of blank check company Digital World Acquisition Corp. (DWAC) will delay its merger with Trump Media and Technology Group, the company said. Its shares rose 5% after the announcement was made.
The Securities and Exchange Commission (SEC) and federal criminal investigators have been scrutinizing the potential merger, which would take Trump Media public.
DWAC, which has $1 billion in financing at risk, needed 65% of its shareholders to support an extension of a merger deadline to September 2023, following initial failed attempts to get the votes from retail investors. The company said that there was "substantial doubt" about its ability to continue as a "going concern," according to a November securities filing.
If a merger were to go through, Trump Media, the parent company of the Truth Social platform, would receive hundreds of millions of dollars in funding. The deal has been put under a criminal probe, leading to a loss of more than $100 million in investment. Internal documents show that Trump Media had also considered mergers and partnerships with other right-wing-friendly platforms, including Rumble and Parler, according to financial news provider RTT News.
In August, Trump Media Senior Vice President William Wilkerson filed a federal whistleblower complaint alleging the company violated securities laws. In September, the company lost $138.5 million of the $1 billion in financing from private investors in public equity, which was to fund the merger. In November, DWAC Board Member Justin Shaner, Chief Executive Officer of Shaner Properties in South Florida, resigned, according to a securities filing.