The social network Truth logo is seen on a smartphone in front of a display of former US President Donald Trump in this illustration taken on February 21, 2022.
Dado Ruvic | Reuters
Digital World Acquisition Corp., the special-purpose acquisition company that agreed to go public with the Trump Media and Technology Group, warned on Monday that potential damage to former President Donald Trump’s popularity could harm his company.
The warning came in a stock filing that set a September 6 shareholders meeting to determine whether to delay the deadline for completing a merger with Trump’s company, which owns the Truth Social app. DWAC also said it could liquidate if the merger is not consummated.
The deadline is currently set for 8 September. The company intends to extend it by one year until September 8, 2023.
“If President Trump becomes less popular or there is further controversy that damages his credibility or people’s desire to use a platform associated with him and from which he will benefit financially, the results of TMTG’s operations, as well as the outcome of the L ‘proposed business combination could be adversely affected, “DWAC said in the filing.
Trump is currently under multiple investigations, including those related to the removal of documents from the White House and the Capitol uprising on January 6, 2021. He launched Truth Social after being banned from Twitter for his tweets on the day of the uprising.
DWAC has expressed concern that the value of the deal could be affected by damage to the former president’s reputation.
The filing also cited polls indicating that Truth Social demand may be limited. “According to The Hill, only 30% of people surveyed would use a social media site associated with President Trump,” the document reads. “Furthermore, according to a poll published in the New York Post, only 60% of Republicans would use such a platform.”
Trump Media and Technology Group did not immediately respond to a request for comment on the DWAC filing. A call to Patrick Orlando, CEO of DWAC, went to the secretariat.
DWAC, in pushing for the deadline extension, also cited ongoing investigations by the Securities and Exchange Commission and the Department of Justice into its deal with Trump Media.
“Our failure to obtain the required regulatory approvals in connection with the business combination or to resolve certain ongoing investigations within the required time frame may require us to liquidate,” the filing reads.
DWAC delayed its earnings report last week.
Shares of DWAC closed flat on Monday, but fell sharply from their highs in October when the Trump deal was announced.