Digital is a special-purpose acquisition company, or SPAC — a publicly traded shell company meant to take a private company public via a merger. SPACs are often referred to as “blank check” companies because investors purchase shares before they know the company that the SPAC will merge with.
Merging with Digital World would make Trump Media a publicly traded company and provide it with hundreds of millions in investment funds. But the deal must have approval from regulators — the Securities and Exchange Commission and Financial Industry Regulatory Authority have been investigating Digital World since last year over whether it violated securities laws when negotiating with Trump.
Digital World needed 65 percent of shareholders to agree to the extension, and the company delayed the vote in September as it sought to shore up investor support for the move. Without the extension, Digital World may have overrun its deadline to merge with another company. SPACs have a limited amount of time to execute a merger before they’re required to liquidate and return money to investors.
Trump Media officials Tuesday accused regulators of deliberately undercutting the deal by moving slowly with their review.
“This vote was necessary because the SEC is trying to sabotage our merger and harm President Trump for purely political reasons,” Trump Media said in a statement to The Washington Post. “By refusing to either approve or reject the deal, and instead tossing the matter into a bureaucratic black hole of inaction, the SEC is violating its own charter and damaging the very retail investors they are sworn to protect.”
The SEC did not immediately respond to a request for comment.
On Tuesday, Digital World’s stock rose more than 5 percent.
Despite having his Twitter account restored over the weekend by new Twitter chief executive Elon Musk, Trump has said he’ll remain on Truth Social and may not return to Twitter — a quandary for the former president who does not want his own social media platform to fail, The Post has reported.
Patrick Orlando, Digital World’s chief executive, said in a Tuesday interview with IPO Edge that it was Trump’s “personal choice” to use social media companies other than Truth Social. But “as of now, I’ve seen him very engaged and very active on Truth,” Orlando said. “I would expect that to continue.”
