Politics

Buyer of Trump’s Truth Social Gets More Time to Complete Merger


Shareholders of a cash-rich shell company approved a measure on Tuesday that will give the firm 12 additional months to complete its long-delayed merger with former President Donald J. Trump’s social media company.

The shareholder vote increases the likelihood that Trump Media & Technology Group will get access to at least $300 million in badly needed cash to operate Truth Social — a right-leaning social media platform.

Truth Social has emerged as Mr. Trump’s primary megaphone for railing against his political opponents, as well as the federal and state prosecutors who have brought four indictments against him. Online ads on the social media platform also account for a critical piece of Mr. Trump’s fund-raising effort for his 2024 presidential campaign.

The shell company, Digital World Acquisition Corporation, raised the $300 million in a September 2021 initial public offering. A little over a month later, the company, set up as a special purpose acquisition company, or SPAC, announced the deal to merge with Trump Media.

If Digital World shareholders had not approved the extension, the company would have had to return the money raised in its I.P.O. to shareholders on Friday.

A SPAC raises money from investors in an I.P.O. in the hopes of finding a private company to acquire. Federal securities laws require SPACs to liquidate and return their cash to shareholders if a deal cannot be completed in a specified period — often two years.

The merger was announced when Truth Social was still in the planning stages and Mr. Trump was barred from posting on most social media platforms after the violent protests at the U.S. Capitol on Jan. 6, 2021.

The deal had been delayed by a regulatory investigation into allegations that Digital World misled investors about talks it held with Trump Media before its September I.P.O., which is prohibited by securities laws. Federal prosecutors also started an investigation into allegations of insider trading in Digital World shares in advance of the October 2021 merger announcement.

In July, Digital World reached a settlement with the Securities and Exchange Commission that required it to revise a some regulatory filings and to pay an $18 million penalty if the merger was completed. Federal prosecutors have charged three men, including a former Digital World director, with taking part in a $22 million insider trading scheme.



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