The Truth social network logo is seen on a smartphone in front of a display of former U.S. President Donald Trump on this picture illustration taken February 21, 2022.
Dado Ruvic | Reuters
Digital World Acquisition Corp., the special purpose acquisition company that agreed to take Trump Media and Technology Group public, warned Monday that potential damage to former President Donald Trump’s popularity could hurt his firm.
The warning got here in a securities filing that set a Sept. 6 shareholder meeting to find out whether to delay the deadline for completing a merger with Trump’s firm, which owns the Truth Social app. DWAC also said it could liquidate if the merger is not consummated.
The deadline is currently set at Sept. 8. The corporate looks to increase it by a yr to Sept. 8, 2023.
“If President Trump becomes less popular or there are further controversies that damage his credibility or the will of individuals to make use of a platform related to him, and from which he’ll derive financial profit, TMTG’s results of operations, in addition to the final result of the proposed Business combination, might be adversely affected,” DWAC said within the filing.
Trump is currently under multiple investigations, including those referring to the removal of records from the White House and the Jan. 6, 2021, Capitol riot. He launched Truth Social after he was banned from Twitter over his tweets on the day of the revolt.
DWAC said it’s nervous that the worth of the deal might be affected by damage to the previous president’s popularity.
The filing also cited surveys that indicated demand for Truth Social may be limited. “Based on The Hill, only 30% of individuals surveyed would use a social media site related to President Trump,” the filing said. “As well as, in response to a survey published in The Latest York Post, only 60% of Republicans would use such a platform.”
Trump Media and Technology Group didn’t immediately respond for a request for comment on DWAC’s filing. A call to Patrick Orlando, CEO of DWAC, went to voicemail.
DWAC, in pushing for the deadline extension, also cited the continued Securities and Exchange Commission and Justice Department investigations into its cope with Trump Media.
“Our failure to acquire any required regulatory approvals in reference to the Business Combination or to resolve certain ongoing investigations inside the requisite time period may require us to liquidate,” the filing said.
DWAC delayed its earnings report last week.
Shares of DWAC closed effectively flat Monday, but they’re down dramatically from their highs in October, when the Trump deal was announced.