Trump Media’s SPAC Deal Faces a Make-or-Break Investor Vote

The deal to take Donald Trump’s social-media company public faces a make-or-break moment as the blank-check firm that’s acquiring it rushes to get investor buy-in.

(Bloomberg) — The deal to take Donald Trump’s social-media company public faces a make-or-break moment as the blank-check firm that’s acquiring it rushes to get investor buy-in.

Digital World Acquisition Corp., the special-purpose acquisition company, is at risk of seeing the deal collapse if investors — made up largely of pro-Trump retail traders — don’t give it another year. 

The shareholder vote next week is crucial for Digital World, whose shares rallied sharply in July on speculation that a settlement with the Securities and Exchange Commission would pave the way for it to buy Trump Media & Technology Group, the owner of the Truth Social platform used by the former president. 

While the shares have since given back some of the gains, they’re still worth roughly 50% more than the cash that investors will receive if the deal falls through. In that case, Digital World would return $10.24 a share to investors and warrants tied to the SPAC would be worthless. The shares closed Wednesday at $15.59 and the warrants rose to $4.06. 

Read more: Trump-Tied SPAC’s Rally at Risk as Sponsors Need More Time (1)

The measure, originally set for an Aug. 17 vote, would mark the fifth extension of the deadline for closing the purchase and give the SPAC until September 2024. While the date of the vote is formally set for Sept. 5, Digital World can delay the final tally till as long as Sept. 8 if they need more time to persuade shareholders to vote and get the required 65% approval. 

The risk for Digital World is that shareholders fail to vote because they “are not paying attention,” said Usha Rodrigues, a professor of corporate law at the University of Georgia School of Law. “It’s economically irrational not to vote for the extension.”

Even if the SPAC gets shareholder buy-in for more time, it’s not a sure thing that the deal will be completed, since Trump Media can opt out by Sept. 30 if its board decides the merger isn’t in investors’ best interest. The companies are also only committed to the deal through Dec. 31.

The additional time is required to contend with the remaining hurdles. Digital World is in the process of restating its 2022 results after announcing in May that it discovered errors in how it accounted for some expenses. The delay in its financial reports has left it facing warnings from Nasdaq that its shares could be delisted.

Digital World’s sponsors and Trump Media have been soliciting investors to vote for the extension. A notice from the Truth Social Team urged investors to vote for it to prevent DWAC’s dissolution. “If you are a DWAC stockholder who believes in Truth Social’s mission to reopen the Internet and give people their voices back, we strongly urge you to vote TODAY,” the notice concluded.

The SPAC hired advisory firm Alliance Advisors to help churn up investor interest to get the votes needed. 

Jay Ritter, professor of finance at the University of Florida, said the fact that so much of Digital World’s stock is held by individual — instead of professional — investors casts doubt on its valuation. 

“If institutional investors really thought it was worth $15 a share they would buy up the shares from retail investors and vote to get things completed,” he said. “But the fact that hedge funds, to the best of my knowledge, haven’t stepped in continues to make it a question mark.”

More stories like this are available on

©2023 Bloomberg L.P.