Some investors are pulling out of the SPAC merger with Trump's media company

Jump to heading Some investors are pulling out of the SPAC merger with Trump's media company

Some investors are withdrawing from Digital World Acquisition Corp's (DWAC) proposal to buy former US President Donald Trump's social media startup Truth Social, SPAC said on Friday.

Digital World said that it has received termination notifications from private investment in public equity (PIPE) investors, resulting in the loss of almost $139 million in assets from the previously disclosed $1 billion commitment.

Investors, who signed the PIPE commitment about one year ago, are allowed to relocate their money after the Sept. 20, 2022 deadline if the deal has not completed.

DWAC did not name the investors who left. Sabby Management, which had pledged $100 million in PIPE, is among the investors who have pulled out, according to Reuters. Sabby Management did not respond to requests for comment.

According to insiders, more investors may withdraw in the coming weeks since they may cancel at any moment after the deadline. Many have been waiting for Digital World to provide more favorable conditions to PIPE investors, according to sources.

Due to civil and criminal investigations into the circumstances surrounding the transaction, the deal between the blank check company and Trump Media and Technology Group (TMTG), which owns Truth Social, has been put on hold.

TMTG did not reply immediately to a request for comment.

The SPAC had hoped that by now, the SEC, which is assessing DWAC's disclosures on the transaction, would have granted its approval.

Digital World said this month that it will prolong the deal's term by three months after its shareholders' proposal for a 12-month extension fell short.
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(ENDI Corp. and its affiliated Registered Investment Advisors do not own a position in DWAC as of September 27, 2022.)

Image by Gage Skidmore, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons