Investors are choosing to walk away from a company that had plans to merge with former US President Donald Trump’s Truth Social. According to a Securities and Exchange Commission filing on Friday, “Blank-check” company Digital World Acquisition stated that several investors are walking away pulling out close to $140 million they had earlier agreed to invest into the deal. Digital World has already made announcements regarding funding commitments worth $1 billion. As per the agreement of the deal, the investors who signed up for the deal almost a year ago could walk away from the deal if it was not finalized by the said deadline, and the deadline for the deal was the 20th of September. Read along to know more.
The What and Why
Several investors who earlier signed up for the merger between Digital World and Trump’s Truth Social are walking away from the commitments made earlier, pulling out over $140 million they had agreed earlier on investing into the deal. Although the SEC filings do not specify the names of the investors who walked away from the deal, reports from Reuters suggest that Sabby Management which planned to invest a whopping $100 million is one among the investors who backed away.
Since the deadline for the merger has already passed, there is every possibility that more investors might walk away from the deal. It is quite possible that they are expecting better terms to be put forth by Digital World since it was not able to meet the merger deadline.
The merger with Truth Social has indeed been a Herculean task for Digital World, and the company deemed it right to blame the Securities and Exchange Commission for delaying the deal. The SEC commenced the examination of the deal in the month of June over the possibility that discussions were held between Digital World and Trump Media even before the special purpose acquisition company went public last year, that too without alerting the watchdog. The result was that subpoenas found their way to the directors of Digital World from a grand jury in the Southern District of New York.
Attaining sufficient approval from shareholders for the merger has also been a task for Digital World, and if they fail to finalize the deal, the company will be forced to liquidate and return the investors’ money.
New: Investors have pulled almost $140 million from Digital World Acquisition; the company planning to merge with Donald Trump's "Truth Social." This comes after multiple directors of Digital World received subpoenas in June from a grand jury in the Southern District of New York.
— Dash Dobrofsky (@DashDobrofsky) September 24, 2022
The deadline for Digital World to acquire Donald Trump's Truth Social passed on Sept 20
Investors are walking away from commitments of $140 million, SEC filings show.
Reuters reported that Sabby Management investors bowed out, taking away $100 million.
— Pam Resists🇺🇸🇺🇦💔💔💔 (@ResisterForever) September 24, 2022
Investors pull almost $140 million from the company planning to merge with Donald Trump's Truth Social.
The deadline for Digital World deal to acquire Donald Trump's Truth Social passed on September 20.
— Outspoken™️ (@Out5p0ken) September 24, 2022
Aww..shucks 🤣🤣🤣🤣 Bet more will back out. Another Trump failure. And it’s hilarious that Nunes signed onto this failure in lieu oh being in congress. Bahaha 🤣 🤣🤣
Investors Pull $140 Million From Merger Deal With Trump's Truth Social https://t.co/c1urcYpvYE
— Lori B (@LaBeyard) September 24, 2022
Many people complain that they lost their life savings when they invested in Donald Trump's 'Truth Social' twitter style social media company. I do not feel sorry for them. Trump's track record of failure is unsurpassed in the US and 5 minutes research would have shown that!
— Harry Denny (@HarryDenny) September 16, 2022