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Trump-linked SPAC's stock decreases as shareholders weigh the lagging merger with the ex-president's media company

Trump-linked SPAC's stock decreases as shareholders weigh the lagging merger with the ex-president's media company

September 01, 2022: -Digital World Acquisition Corporation, the company is planning to take Trump Media and Technology Group public, witnessed its stock price drop on Monday as shareholders consider the merger and the former president contends with a host of legal problems.

On Monday, DWAC expressed that voting for a yearlong delay would open. The current deadline to take Trump Media public is September 8. DWAC is warning that it may be forced to liquidate if the deadline is not extended. A shareholder meeting is scheduled for September 6.

Shares of DWAC closed about 8% at $25.32, off 16% this month and significantly below their 2022 peak of about $97.

Trump Media and Technology Group controls Truth Social, reportedly facing severe financial problems. A merger with DWAC would give Trump’s company access to billions of dollars in publicly traded stock markets.

The former president created Truth Social to compete with Twitter after being banned from the platform over his tweets regarding January 6, 2021, U.S. Capitol riot. On that day, hundreds of Trump’s supporters stormed the building in a bid to block Congress from confirming Joe Biden’s victory in the 2020 presidential election.

FBI agents searched the former president’s Mar-a-Lago home earlier this month. An affidavit justifying the search said there was “probable cause to believe that evidence of obstruction will be found” at his home.

DWAC warned last week that damage to the former president’s dwindling popularity could hurt the deal. Earlier this month, the U.S. Patent and Trademark Office denied Trump Media’s trademark application for “TRUTHSOCIAL” because the title was similar to existing registered marks.

The Securities and Exchange Commission and the Justice Department have investigated the proposed merger between DWAC and Trump Media. Federal prosecutors have subpoenaed Trump Media as it probes possible undisclosed conversations between the SPAC and Trump Media employees that may have violated securities regulations.

The former president is dealing with multiple investigations, including a probe into possible interference in Georgia’s presidential election process and his role in the events of January 6, 2021.

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