Former US President Donald Trump waves while walking to a vehicle outside of Trump Tower in New York City on August 10, 2022.
STRINGER/AFP via Getty Images
DWAC said Monday a potential decline in Donald Trump’s popularity will hurt Truth Social’s business.
DWAC will ask shareholders if it should extend the deadline to merge with TMTG by one year, to September 8, 2023.
Trump’s Mar-a-Lago resort home was raided this month by the FBI as part of a DOJ investigation.
Digital World Acquisition Corp. on Monday raised the prospect of delaying merger plans with Donald Trump’s social media company, saying that Trump’s business could be dented by a potential decline in the former US president’s popularity.
Digital World Acquisition Corp. will hold a shareholder meeting on September 6 over whether to extend the date by which it must complete its plan to take public Trump Media & Technology Group, the firm that runs Trump’s Truth Social platform. DWAC informed shareholders of the meeting in a filing with the US Securities and Exchange Commission.
“The success of the Business Combination depends in part on the popularity of TMTG’s brand and the reputation and popularity of its Chairman, President Donald J. Trump. The value of TMTG’s brand may diminish if the popularity of President Trump were to suffer,” said DWAC.
DWAC’s stakeholders may decide in favor of extending the merger deadline by one year, to September 8, 2023. DWAC said may be forced to liquidate if a business combination doesn’t materialize.
Trump’s popularity, reputation, and image are key factors in the success of TMTG, said DWAC, noting that TMTG believes there is “sufficient demand for a true free speech platform,” such as Trump’s Truth Social app that he launched in February.
News of the meeting comes as Trump is the subject of at least three major investigations related to the 2020 election, the January 6, 2021, insurrection at the US Capitol, and his finances. The FBI raided Trump’s Mar-a-Lago resort residence in Palm Beach, Florida, earlier this month as part of a Department of Justice probe into potential obstruction of justice and Espionage Act violations by Trump.
DWAC in its filing cited a survey by The Hill news site saying only 30% of respondents would use a social media site associated with Trump and cited a New York Post survey that found only 60% of Republicans saying they would use such a platform.
“In order to be successful, TMTG will need millions of those people to register and regularly use TMTG’s platform,” said DWAC. “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 shares during Monday’s session were up about 1% at $30.24. The stock has lost about 41% during 2022.