(San Francisco) The IPO of Donald Trump’s media group, in which his Truth Social network is housed, seemed compromised Thursday after the cancellation of several major investments.
For almost two years, Trump Media and Technology Group (TMTG) has been seeking to merge with listed company Digital World Acquisition Corp (DWAC) to join Wall Street.
But DWAC announced it would return $533 million to certain investors, according to documents filed Thursday with the SEC, the US market watchdog.
DWAC is a SPAC, that is, a listed company that aims to attract investors and then join forces with a target company that is looking to go public.
DWAC and TMTG “announce progress toward certain investors canceling their commitments to purchase up to 1 million shares of DWAC […],” the two companies say in the document. “DWAC continues discussions with investors to cancel the remaining investment ($533 million) with a view to terminating the placement.”
Quoted in the press release at the end of the document, Eric Swider, boss of DWAC, presents this news as “positive”.
“Despite how others may seek to characterize them […], we want our shareholders to understand that these cancellations are a positive development in our ability to complete the business combination,” he assures.
“Upon completion of the merger, TMTG’s reduction in capital requirements reflects its commitment to developing a sustainable business model. This is a path that the management of Digital World Acquisition Corporation fully supports,” he added.
Earlier this month, DWAC and TMTG added an option to their merger agreement, which allows either party to terminate it between October 31 and November 21 if their boards of directors do not believe more than the merger will benefit shareholders.
TMTG did not immediately respond to a request from AFP.
Since the merger agreement was announced in October 2021, numerous twists and turns have prevented it from being completed, including an investigation by US federal authorities and irregularities reported to the SEC by one of TMTG’s founding executives .
