Donald’s Trump’s Truth Social got a lifeline this week after a blank-check company that could infuse the social media platform with cash agreed to extend a critical deadline for a year
Digital World Acquisition Corp., a special-purpose acquisition company, or SPAC, had a Friday deadline to complete its acquisition of, or merger with, Truth Social parent Trump Media & Technology Group.
Digital World shareholders, who have agreed to extend the deadline four times already, agreed to do so again this week with about 72% of shareholders voting to push the merger deadline until Sept. 8, 2024, according to the company.A merger would release to Trump Media $290 million held by Digital World and another $1 billion that private investors had committed to the combined company.
In July the SEC announced that it reached a settlement with Digital World on fraud charges. The SEC said it found that Digital World misled investors and the Commission by failing to disclose that it had formulated a plan to acquire and was pursuing the acquisition of TMTG prior to Digital World’s initial public offering. Digital World agreed to a cease and desist order and to pay an $18 million penalty if it completes the merger.in a federal criminal probe.
A SPAC has no product or service to sell and is set up solely to merge or acquire another business. They are used to speed a company’s entry into the public market, but have come under increased scrutiny because they lack the transparency of a traditional initial public offering of shares.
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