Trump's Truth Social deal facing 'catastrophic threat' of having to return $300 million to investors

Donald Trump's venture into social media with the creation of Truth Social could come to a screeching halt in the near future if the merger with Digital World collapses and he faces ending up with nothing from the deal that has been pending for two years.

According to a new report from the Washington Post, there is a Sept. 8 deadline for the merger to close or be extended and, should it fail, Digital World will be compelled by law to return $300 million to investors.

The Post's Drew Harwell is reporting, "With the $300 million Digital World had already raised from investors, Trump Media & Technology Group, creator of the pro-Trump social network Truth Social, pledged then that the merger would create a tech titan worth $875 million at the start and, depending on the stock’s performance, up to $1.7 billion later," before adding, "Now, almost two years later, the deal faces what could be a catastrophic threat."

POLL: Should Trump be allowed to run for office?

As the report notes, the past two years have been chaotic with executive departures, accusations of insider trading, and an $18 million settlement over accusations executives misled investors and the SEC.

According to Jay Ritter, a University of Florida finance professor, "The deal does seem to be running out of time. You can’t just keep getting extensions forever.”

"Digital World needs 65 percent of the shares held by its nearly 400,000 investorsto vote 'yes' on the deadline extension; unvoted shares are counted as 'no' votes. If the extension fails, Digital World said in a filing in July that it would 'cease all operations except for the purpose of winding up' and repay investors at a price of about $10.24 per share — far below what many shareholders paid," the Post is reporting.

RELATED: How much damage has the Trump-Putin collusion inflicted on the US?How much damage has the Trump-Putin collusion inflicted on the US?

"Trump, who would retain his 90 percent ownership of Trump Media if the deal falls apart, has yet to make mention of the shareholder vote on his own Truth Social account," the Post's Harwell is reporting before adding, "Truth Social has attracted a relatively meager following. Though Trump Media projected in a 2021 investor presentation that the site would have 41 million total users by the end of this year, usage estimates from Similarweb, a data firm that analyzes web traffic, suggest it is a long way from reaching that goal."

You can read more here