Digital is a special-purpose acquisition firm, or SPAC — a publicly traded shell firm meant to take a non-public firm public by way of a merger. SPACs are also known as “clean verify” corporations as a result of traders buy shares earlier than they know the corporate that the SPAC will merge with.
Merging with Digital World would make Trump Media a publicly traded firm and supply it with tons of of hundreds of thousands in funding funds. However the deal should have approval from regulators — the Securities and Change Fee and Monetary Business Regulatory Authority have been investigating Digital World since final yr over whether or not it violated securities legal guidelines when negotiating with Trump.
Digital World wanted 65 p.c of shareholders to comply with the extension, and the corporate delayed the vote in September because it sought to shore up investor help for the transfer. With out the extension, Digital World might have overrun its deadline to merge with one other firm. SPACs have a restricted period of time to execute a merger earlier than they’re required to liquidate and return cash to traders.
Trump Media officers Tuesday accused regulators of intentionally undercutting the deal by transferring slowly with their evaluate.
“This vote was obligatory as a result of the SEC is attempting to sabotage our merger and hurt President Trump for purely political causes,” Trump Media mentioned in a press release to The Washington Publish. “By refusing to both approve or reject the deal, and as a substitute tossing the matter right into a bureaucratic black gap of inaction, the SEC is violating its personal constitution and damaging the very retail traders they’re sworn to guard.”
The SEC didn’t instantly reply to a request for remark.
On Tuesday, Digital World’s inventory rose greater than 5 p.c.
Regardless of having his Twitter account restored over the weekend by new Twitter chief government Elon Musk, Trump has mentioned he’ll stay on Reality Social and will not return to Twitter — a quandary for the previous president who doesn’t need his personal social media platform to fail, The Post has reported.
Patrick Orlando, Digital World’s chief government, mentioned in a Tuesday interview with IPO Edge that it was Trump’s “private alternative” to make use of social media corporations aside from Reality Social. However “as of now, I’ve seen him very engaged and really lively on Reality,” Orlando mentioned. “I might count on that to proceed.”