Digital World Acquisition Corp. (DWAC) stock advanced Thursday as the special purpose acquisition company, aiming to take former President Donald Trump's tech and social-media platform public, once again pushed out its shareholder vote on whether to approve a deadline extension to complete the merger.
XDWAC CEO Patrick Orlando adjourned the Thursday shareholders meeting until Nov. 22. During the brief gathering Thursday, Orlando said DWAC is delaying the vote to give stockholders additional time to cast their votes.
DWAC's original deadline to complete its merger with Trump Media and Technology Group, the parent of the conservative social-media platform Truth Social, had been early September. However, a Securities & Exchange Commission investigation of the deal delayed the proceedings, the companies claim. DWAC management adjourned a scheduled Sept. 8 shareholder vote on whether to approve a deadline extension, pushing the vote to October.
Orlando also adjourned that October meeting, again delaying the vote, to Nov. 3. Thursday's meeting took place as Tesla (TSLA) chief Elon Musk has now officially taken over Twitter. Musk has signaled people who have been banned from the social media platform, including Trump, may be reinstated. Last week, Trump told Fox News Digital he plans to remain on Truth Social.
"I don't think Twitter can be successful without me," Trump told Fox. The former president declined to say whether he would return to Twitter if his ban was rescinded.
"I am staying on Truth. I like it better, I like the way it works, I like Elon, but I'm staying on Truth," Trump told Fox News.
Truth Social launched after Twitter shut down Trump's account following the Jan. 6 riot at the U.S. Capitol. Some industry observers contend that a return to Twitter could redirect a large portion of Truth Social's audience to the more mainstream channel.
DWAC Stock: Merger Vote History
With DWAC shareholders failing to complete a vote in September, the SPAC's sponsor, ARC Global Investments, contributed about $2.9 million to extend the merger deadline until Dec. 8, according to federal filings. The vote arranged by DWAC management provides shareholders an opportunity to extend the deadline until Sept. 8, 2023.
Now that DWAC has funding, if Orlando does not get enough votes supporting a deal by Thursday, he can adjourn the extension meeting as many times as he wants until Dec. 8.
DWAC stock edged up 0.7% to 16.33 during Thursday's stock market trading. On Wednesday, shares dropped 2.7%. DWAC stock is down 90% from its Oct. 22, 2021 high of 175, marked just after news of the Trump merger deal first broke.
An Aug. 25 SEC filing showed DWAC asked shareholders to approve an extension for it to complete its business merger.
DWAC warned investors that if the yearlong extension was not granted, the company could potentially cease operations and liquidate shares.
Federal filings also show the SPAC is hemorrhaging cash. In an SEC document, DWAC revealed that between Sept. 19 and Sept. 23 it had received termination notices from private investment in public equity (PIPE) investors representing around $139 million.
This comes after DWAC reported in its quarterly report on Aug. 23 that it had lost $6.2 million in the first half of the year.
SEC Probes DWAC
DWAC announced in October 2021 it intended to merge with Trump Media and Technology Group, with the aim of taking Trump's company public. However, the SEC began to investigate DWAC's business dealings in December.
After the merger announcement, DWAC stock rose but observers were skeptical about the speed at which the deal came together. Shares of Digital World began trading on Sept. 30, 2021. Then the stock briefly spiked more than 1,600% in the two days following the Trump media merger announcement, on Oct. 20, 2021.
Shares retreated from those highs, but traded as much as 914% above the September, 2021, launch price as recently as March.
In late June, a DWAC SEC filing revealed a federal grand jury in the Southern District of New York had subpoenaed the company's board members seeking more details on the merger deal. At the time, DWAC warned the Justice Department and SEC investigations risked slowing or ending the merger altogether.
On Oct. 15, the Washington Post reported on how Will Wilkerson, one of Trump Media and Technology Group's first employees, has accused the company violated securities laws and that Trump pressured executives to hand over their shares to his wife.
Wilkerson was fired from his role as senior vice president of operations at the company after he spoke to Washington Post. Wilkerson alleges the company taken part in "fraudulent misrepresentations" and violated federal securities laws.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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