Trump supporters could lose 'millions' as shell company trying to acquire Truth Social faces liquidation
On Thursday, Matthew Sheffield of The Young Turksreported that supporters of former President Donald Trump are facing the prospect of collectively losing millions of dollars they invested into Digital World Acquisition Corp. (DWAC), the special purpose acquisition company, or "blank check" firm that has sought to purchase the former president's Truth Social platform to take it public, as DWAC faces its liquidation deadline with little progress on completing the deal.
"In a call with investors, Patrick Orlando, the chairman and CEO of the struggling shell company announced that DWAC was going to reconvene on Nov. 22," said the report. "It was an ominous sign that Digital World had failed to receive authorization from 65% of shareholders to continue the company’s existence, despite months of trying. Under the terms of DWAC’s incorporation, the company was supposed to merge with a private firm within one year’s time or dissolve and reimburse its investors at a rate of about $10 per share."
"Liquidation appears more likely to be DWAC’s fate as Trump himself appears increasingly uninterested in the company (or its stockholders) as it has struggled to defend itself from a criminal investigation that executives engaged in prohibited insider trading and a separate inquiry from the Securities and Exchange Commission about allegations of illegal contact between DWAC officers and the leadership of Trump Media and Technology Group (TMTG)," said the report.
According to the report, many Trump supporters are set to take a haircut after purchasing DWAC at $90 a share.
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"In remarks posted on Truth Social after the latest postponement, members of the site expressed increasing frustration with DWAC’s leadership," the report continued. "'We are all in the dark and have no idea what's going on after multiple extensions,' one member wrote. 'I agree this is BS!' another user replied. 'I love Truth Social but I can honestly say that I’ve never seen anything like this in my life! Guess our stock is fixin to drop lower on the news!'"
Truth Social, which was founded to be an alternative to Twitter after the former president's ban from that site for his role in inciting the January 6 insurrection at the U.S. Capitol, has been facing other problems. The co-founder of TMTG has alleged violations of securities laws and improper pressure to transfer shares to former First Lady Melania Trump. And Orlando himself faces a fraud lawsuit by a former executive at DWAC, who alleges he was improperly pushed out of the deal.
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