[ad_1]
Truth Social Public, a complex deal to take over Donald Trump’s social-media platform Truth, faces a key test next week that could determine whether it will become the multibillion-dollar company that the former US president once vowed that she would stand up to “big technology” or rather be drowned in it. Hanging in financial limbo.
Under the terms of the deal announced in October 2021, Trump’s Trump Media & Technology Group was set to merge with Digital World Acquisition Corp., a special purpose acquisition company, or SPAC.
But Digital World’s shareholders are now being asked to give the company another year to complete the deal. If they refuse to do so at a meeting on September 8, the venture will never become the $1.7 billion company it once envisioned.
The road to tech money hasn’t been an easy one for Trump and his supporters.
Jay Ritter, a finance professor at the University of Florida, told the Washington Post this week that the merger “has been pretty unprecedented in terms of all the goofs”. The Post published a detailed exploration of the platform’s current state, leading Trump media spokeswoman Shannon Devine to accuse the paper of posting “a heap of bias”.
Soon after Digital World’s announcement of plans to merge with Trump Media began, it was alleged that talks between the two took place before they were allowed under SPAC rules.
In March, Patrick Orlando was removed as CEO by Digital World’s board and a former board member was accused of insider trading.
The deadline for completing the deal has already been extended five times. Digital World is facing warnings from the tech-heavy Nasdaq stock exchange that its shares could be delisted over a reporting issue.
In July, shares of Digital World soared 93% ahead of an initial $18 million settlement with the Securities and Exchange Commission on accounting fraud charges.
Last month, the company and Trump Media urged investors to vote for an extension to prevent the dissolution of the DWAC.
As Bloomberg reports, the notice said, “If you are a DWAC shareholder who believes in Truth Social’s mission to re-open the internet and give people their voices back, we ask you to vote today.” urge.”
But the Trump media has blamed regulators for delaying the deal. Last year, it accused the SEC of working to “sabotage” the merger, telling The Washington Post that the agency had “threw the matter into a black hole of bureaucratic inaction” and violated its own charter. did.
If shareholders fail to approve the expansion, Digital World will have to liquidate and return the $300 million it raised, leaving Trump’s Trump Media & Technology Group with nothing from the transaction.
When the deal was announced, US stock investors were still troubled by the prospect that SPAC deals would be an easier way for companies to go public than traditional IPOs that impose heavy financial disclosure burdens.
Skip past newsletter promotion
Our US morning briefing covers the day’s top stories, tells you what’s happening and why it matters
“,”newsletterId”:”us-morning-newsletter”,”successDescription”:”We’ll send you the first thing every weekday”}” clientOnly>Privacy Notice: Newsletters may contain information about donations, online advertising and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.
after newsletter promotion
However, enthusiasm for blank-check spikes quickly cooled. At its peak in early 2021, hundreds of people were present. But regulators soon tightened terms and investors fled and the number of completed deals plummeted.
But at one point, investors in the digital world were excited about an alliance with Trump. Shares in Digital World rose to $175 when the merger was announced. They were at $ 16.51 on Friday.
Trump himself envisioned a social media company that, he said, would “stand against the tyranny of big tech”.
But there have been recent signs that even Trump may be tiring of his social-media game. Truth Social is estimated to have around 2 million users – a tiny fraction compared to Facebook’s 2.9 billion, YouTube’s 2.5 billion, WhatsApp’s 2 billion, Instagram’s 2 billion and X, formerly Twitter, which has around 541 million users .
When Truth Social was launched, Joshua Tucker, co-director of the NYU Center for Social Media and Politics, told the Guardian that part of the company’s problem was that it had a “network effect” that excluded a large part of the political spectrum. There was a lack.
Tucker said, “They went behind the Maga part of the population, so they were starting with one hand tied behind their back.” “Even before the launch and rollout problems, it’s a tough sell.”
Trump recently decided to return to Ax to post his infamous Georgia election prosecution booking mugshot. However, he insisted last week that Truth Social is still his social media “home”, writing: “There is nothing that even comes close!!!”
Source
[ad_2]