The shell company struggling to take Donald Trump’s Trump Media and Technology Group public just bought itself some desperately needed time. Thanks to a new shareholder vote, Digital World Acquisition Corp (DWAC) will now have until September 8, 2023 to complete its merger with the Truth Social parent company
More than 65% of DWAC shareholders on Tuesday voted in favour of extending its merger agreement deadline with TMTG after delaying the vote six separate times. The extension vote, taking place just one week after Trump officially announced his 2024 presidential election bid, comes amid multiple investigations into DWAC from the Securities and Exchange Commission and a federal grand jury which DWAC claims delayed the merger process.
The extension provides a breath of life to the DWAC, which reportedly could have faced liquidation next month had the vote failed, a setback which would have left Trump’s hopeful media company stranded from its primary financial partner. Trump Media stands to gain hundreds of millions in funding if the DWAC merger goes through.
In the weeks leading up to the vote, DWAC CEO Patrick Orlando reportedly scammed shareholders with phone calls urging them to vote in favour of the extension. While that’s not out of the ordinary for large shareholders, The New York Post notes Orlando reached out to DWAC investors with as few as 20 shares each, an aggressive move bordering on desperation. Orlando reportedly poured $US3 ($4) million into the deal in September to keep DWAC from liquidating.
“It’s a really arduous process when you have as many stockholders as we did,” Orlando said during a “fireside chat” interview with IPO Edge prior to the vote.
Will Trump Keep Truthing?
The extension vote comes at a potentially precarious time for Truth Socal whose brand is directly tied to Donald Trump’s involvement on the platform. The former president “Truths” regularly on the platform and has repeatedly expressed interest in building out its online presence but that was all while he was banned from Twitter. Newly minted Twitter CEO Elon Musk lifted that ban over the weekend after publicly polling his Twitter followers on the issue.
“The people have spoken,” Musk said following the poll. “Trump will be reinstated.”
The people have spoken.
Trump will be reinstated.
Vox Populi, Vox Dei. https://t.co/jmkhFuyfkv
— Elon Musk (@elonmusk) November 20, 2022
Whether Trump will actually return to the platform that helped elect him president and at times served as his own digital bully pulpit remains uncertain. Speaking virtually at the the Republican Jewish Coalition’s annual leadership meeting over the weekend, Trump said he saw, “no reason” to return to Twitter, echoing similar commitment he made to Truth Social earlier this year.
“I don’t see any reason for it,” Trump said, according to The Hill. “They have a lot of problems at Twitter, you see what’s going on. It may make it, it may not make it.”
When asked about Trump’s reinstatement on Twitter, Orlando, DWAC’s CEO, said the poll boded well for Trump’s overall popularity and added that while it’s ultimately the former president’s choice which platform he decides to post his rants on, he expected Truth would remain Trump’s primary platform.
“I think he’s quite happy with the platform and using it so we’ll see how the cookie crumbles in the future,” Orlando said. As of writing, Trump has yet to post on Twitter. Orlando went on to criticise Twitter, which he said appeared to be undergoing a significant chaotic cultural shift.
“I don’t know how the loss of free lunch will go over with the employees there,” Orlando said, responding to news that Musk planned to end the company’s lunch meal program in a penny pinching effort to cut costs. “In my opinion, Twitter has its own set of challenges,” Orlando added.
There are potential other factors complicating Trump’s return to Twitter too. SEC documents released earlier this year outlined a quasi-exclusive posting deal Trump had struck with Truth Social claiming the former president is, “generally obligated,” to post on Truth and not make the same post on another platform for at least six hours.
Additionally, since Truth and TMTG’s values are so inherently tied to Trump’s usage of the platform, his prior statements simply signalling commitment to continue using the platform over Twitter may have raised the company’s stock value. That means if Trump does continue tweeting where he left off in 2020, shareholders could potentially say they were being misled.
“That’s kind of a textbook securities fraud lawsuit,” Columbia Laws school corporate law professor Eric Talley said in an interview with Semafor.
At the same time, Trump appears to have left himself a major escape route. As a caveat to the exclusivity deal, Trump can post content on any platform so long as it is considered political, which, let’s face it, is pretty much all of Trump’s posts if he’s a political candidate. When asked about those potential conflicts, Orlando said he didn’t see any reason there would be any restriction on Trump, “other than his personal choice.”