The Truth social community emblem is seen on a smartphone in entrance of a show of former U.S. President Donald Trump on this image illustration taken February 21, 2022.
Dado Ruvic | Reuters
Digital World Acquisition Corp., the particular objective acquisition firm that agreed to take Trump Media and Technology Group public, warned Monday that potential injury to former President Donald Trump’s popularity could hurt his agency.
The warning got here in a securities submitting that set a Sept. 6 shareholder assembly to find out whether or not to delay the deadline for finishing a merger with Trump’s agency, which owns the Truth Social app. DWAC additionally stated it could liquidate if the merger is not consummated.
The deadline is at present set at Sept. 8. The firm appears to be like 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 desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG’s results of operations, as well as the outcome of the proposed Business combination, could be adversely affected,” DWAC stated within the submitting.
Trump is at present underneath a number of investigations, together with these regarding the elimination of data 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 riot.
DWAC stated it’s apprehensive that the worth of the deal could be affected by injury to the previous president’s status.
The submitting additionally cited surveys that indicated demand for Truth Social is likely to be restricted. “According to The Hill, only 30% of people surveyed would use a social media site associated with President Trump,” the submitting stated. “In addition, according to a survey published in The New York Post, only 60% of Republicans would use such a platform.”
Trump Media and Technology Group did not instantly reply for a request for touch upon DWAC’s submitting. A name to Patrick Orlando, CEO of DWAC, went to voicemail.
DWAC, in pushing for the deadline extension, additionally cited the continued Securities and Exchange Commission and Justice Department investigations into its cope with Trump Media.
“Our failure to obtain any required regulatory approvals in connection with the Business Combination or to resolve certain ongoing investigations within the requisite time period may require us to liquidate,” the submitting stated.
DWAC delayed its earnings report final week.
Shares of DWAC had been up greater than 3% on Monday morning, however they’re down dramatically from their highs in October, when the Trump deal was introduced.