By Senad Karaahmetovic
Digital World Acquisition (NASDAQ:), the special purpose acquisition company (SPAC) that merged with Trump Media & Technology Group (TMTG) last year, has failed to secure support from shareholders to secure a one-year extension that is needed to complete the merger, Reuters reports.
TMTG, which has developed the Truth Social app, was about to receive a $1.3 billion cash injection from the SPAC merger. Reuters reports that shareholders were expecting a nod from the U.S. Securities and Exchange Commission (SEC) for the transaction to proceed. The agency launched a probe into possible securities violations over the deal.
The report notes that DWAC’s management is struggling to secure enough votes. The outcome of the vote is due to be known today after the shareholders’ meeting. 65% of shareholders should vote in favor of the proposal to get a 12-month extension.
Last week, Digital World CEO Patrick Orlando spoke about the challenges of getting Digital World’s shareholders to vote through their brokers. The deadline to complete the SPAC merger is Thursday.
In case DWAC fails to secure backing from shareholders, Orlando warned it could force the business into liquidation. Still, an extension of up to six months could be granted if deal sponsors add money to the trust.
DWAC shares are down over 20% in premarket Tuesday.