Trump-linked SPAC faces new pressure from investors as merger hangs in the balance

Digital World Acquisition Corp., the institution readying to instrumentality Trump Media and Technology Group public, is facing capitalist concerns astir a imaginable failed merger with erstwhile President Donald Trump's company.

The Financial Times reported Tuesday that DWAC Chief Executive Patrick Orlando is negotiating with investors who said they would backmost the institution done a backstage concern successful nationalist equity, oregon PIPE, deal.

The $1 cardinal woody was acceptable to expire Tuesday. If it falls apart, it would mean a batch little wealth for Trump Media, adjacent if it did extremity up going nationalist done a merger with DWAC. Orlando was pushing for a 10-day extension, according to the newspaper.

The PIPE investors are hoping to bring down the minimum conversion terms for their preferred banal from $10 to arsenic debased arsenic $2, the FT reported, citing a idiosyncratic progressive successful the talks. That would boost their imaginable nett connected the deal, adjacent successful the worst lawsuit scenario, arsenic it would springiness the investors much shares and dilute different shareholders' stakes – including Trump's.

The dialog is an effort to displacement hazard to DWAC and Trump Media, which owns Truth Social. DWAC shares are presently trading astatine astir $20, down importantly from $97 highs earlier this year, but inactive supra the $10 liquidation price.

"Trump wants to marque definite helium doesn't look a batch of dilution," 1 idiosyncratic progressive told the FT. "Optically, helium wants to debar a $2 floor. It looks anemic and helium doesn't privation to look weak."

Representatives for DWAC and Trump Media didn't instantly respond to a petition for comment.

DWAC is simply a peculiar intent acquisition company, oregon SPAC, a publically traded entity that takes pre-existing companies public. Orlando extended a deadline to merge with Trump Media beyond its aboriginal September day with a $2.8 cardinal infusion from his company, the SPAC sponsor, ARC Global Investments II. DWAC is pushing shareholders to o.k. a yearlong hold of the deadline. The adjacent shareholder gathering is acceptable for adjacent month.

If the merger deadline is not extended, DWAC has warned that the institution whitethorn person to liquidate, returning shareholders astir $10 per share, the archetypal stock terms for a SPAC.

Trump founded Trump Media and Technology Group and its level Truth Social aft helium was banned from Twitter pursuing the Jan. 6, 2021, Capitol riot. The erstwhile president is facing aggregate investigations relating to the effort to overturn the 2020 statesmanlike predetermination and the removal of delicate documents from the White House. Trump Media's planned merger with DWAC is the taxable of national probes into imaginable securities violations.

After a roar successful 2020 and 2021, SPACs person mostly dried up. "SPAC King" Chamath Palihapitiya fto 2 of his blank-check companies dissolve Tuesday arsenic their deadlines passed without extension.

Orlando, DWAC's CEO, saw one of his SPACs liquidate successful 2021. He has until December to forestall Digital World Acquisition Corp. from gathering the aforesaid fate.