(Jacob Bruns, Headline USA) In what amounts to good news on the whole for former President Donald Trump’s social media platform, Truth Social, it was announced that the company will have an additional year to complete its merger with the Digital World Acquisition Corp., Axios reported.
The merger so far has been plagued by difficulties between Truth Social owner Trump Media & Technology Group–Truth Social’s parent company–and DWAC.
Digital World, which is a so-called special purpose acquisition company that enables the merged organization to go public, needed yes votes from slightly less than two-thirds of the shares owned by approximately 400,000 shareholders.
The great difficulty was that the shareholder base is made up largely of “small-time ‘retail’ investors, making it harder for the company to boost shareholder participation in critical votes,” according to Jay Ritter, a University of Florida finance professor.
If it had failed, DWAC would have been liquidated, leaving Trump with no potential buyers and in need of other major investors. But DWAC underwent a major effort over the past week to secure the necessary votes that would be needed to extend the merger’s deadline by a year–and for the second time.
The news, of course, is not guaranteed that the merger will succeed, although if it had not happened, the odds would have been nil.
If the merger ever does happen, the new tech entity is reportedly projected to be valued at a range of $875 million to $1.7 billion. The deadline for the high-finance transaction to consummate has reportedly been extended five times already.
But fortunately for all involved, the deadline has been extended.
“If the vote fails, Digital World will be required by law to liquidate and return $300 million to its shareholders, leaving Trump’s company with nothing from the transaction,” the Washington Post reported on Sept. 2.
