By Helen Coster
NEW YORK (Reuters) – Digital World Acquisition Corp (DWAC), the blank-check acquisition firm that plans to merge with former U.S. President Donald Trump’s social media agency, stated on Thursday it could return to buyers $533 million raised for a money infusion within the deal, after some already backtracked on one other $467 million of commitments.
The event is the nail within the coffin of the $1 billion funding that DWAC had raised for the merger with Trump Media & Know-how Group (TMTG), which runs the Fact Social platform. It raises additional doubts about whether or not the previous U.S. president will go forward with the deal, now that TMTG not stands to obtain $1 billion if and when it closes.
The transfer leaves DWAC with the $293 million money it had raised in its preliminary public providing in September 2021, which is about to go to TMTG upon the deal’s closing. That pot of cash may additionally shrink if buyers go for redemptions.
It was unclear how TMTG will fund itself if the deal doesn’t undergo. TMTG beforehand raised $22.8 million in financing from personal buyers, Reuters reported final October.
DWAC and TMTG have added an choice to their amended merger settlement that permits both aspect to terminate the merger deal between Oct. 31 and Nov. 21 if their boards not consider the merger will profit shareholders, in line with an Oct. 2 regulatory submitting. In response to a Feb. 2, 2021 providers settlement, Trump controls 90% of TMTG.
Representatives from DWAC and TMTG didn’t instantly reply to requests for remark.
Digital World has confronted challenges because the October 2021 announcement that it was planning to amass TMTG. It has been the goal of investigations by the U.S. Division of Justice and the Securities and Change Fee (SEC); ousted its chief government, and shook up its board.
In September DWAC Traders voted to surrender to a one-year extension to finish the TMTG deal, the deadline for which had been delayed a number of occasions.
Shares of Digital World had been buying and selling at $15.70 on Thursday, down .98% on the day and down from a peak of round $97 a share in March, 2022.
(Reporting by Helen Coster; Enhancing by Josie Kao)