Digital World Acquisition Corp. DWAC could risk being liquidated as the Special Purpose Acquisition Vehicle (SPAC) that was set to merge with Trump Media & Technology – the company behind it donald trump‘s truth social Platform failed to garner shareholder support for a one-year extension to complete the deal, Reuters reported.
What happened: The proposal to extend the deal Monday received far less than the 65% shareholder vote needed for it to go into effect, according to Reuters reportedciting people familiar with the matter.
The final number of votes would be officially announced at a special meeting of Digital World shareholders scheduled for Tuesday.
See also: Could Donald Trump’s SPAC deal fall apart? Here are the stakes
Why it matters: Completion of the deal has been delayed due to a lack of clearance from the SEC, which is reportedly reviewing the company’s disclosures related to the deal.
Given the voting trend, Digital World is not confident of garnering shareholder support for the extension and is considering options including a possible extension of the voting period, Reuters said.
The report also suggested that the company could use the option to extend the deadline by up to six months without shareholder approval.
Failure to close the deal would jeopardize the prospect of TMTG receiving a $1.3 billion cash infusion it was due to receive from Digital World, according to an agreement reached last October.
Truth Social was circulated by Trump’s team following his ban on social media platforms, including Twitter, Inc. TWTR after the January 6 riots on Capitol Hill. It is available for download at apple inc‘s AAPL App Store, though Alphabet, Inc WELL Google Google Play Store rejected it.
price action: Digital World closed Friday’s session up 5.80% at $24.99 Benzinga Pro data
