Digital World Acquisition (DWAC) , the blank check company attempting to merge with Donald Trump's fledgling media group, slumped lower after the former President was invited to return to Twitter by new CEO Elon Musk.
Musk, who completed his $44 billion purchase of Twitter last month, ran a weekend poll from his own account over the weekend, asking if the former President should be allowed to return to the platform, that garnered more than 15 million user replies. Around 51.8% approved his return.
"The people have spoken," said Musk, who had previously insisted that banned accounts could only return after establishing a "clear process for doing so. "Trump will be reinstated".
The former President himself, banned for inciting a deadly riot that ultimately stormed the U.S. Capitol on January 6, 2021, said when informed of his invitation to return that the Twitter platform has “a lot of problems".
Trump added that he'll stick to communicating his 2024 election run through Truth Social, a platform he developed through his Trump Media group and plans to list on the Nasdaq through Digital World Acquisition Corp.
He may also be motivated by terms of his agreement with the group, which only allow him to post messages on rival social media platforms six hours after he has done so on Truth Social until June of next year.
Digital World Acquisition shares were marked 6.7% lower in early Monday trading to change hands at $19.94 each. The shares traded as high as $97.25 each in late March.
Digital World Acquisition, a special purpose acquisition company -- often referred to as a SPAC -- went public in September of last year with a much-hyped plan to merge with Trump Media & Technology Group (TMTG) and bring it onto the Nasdaq.
However, the deal with TMTG, which owns the Truth Social app favored by the former president, has been delayed by a series of investigations into its dealings with Digital World prior to the September 2021 IPO as well as questions linked to its underlying finances.
That has created the potential for its ultimate collapse, as Digital World seeks to gather the support of shareholders in order to extend its merger plans until September of next year. Failing to do so could result in the liquidation of the SPAC and the return of cash to shareholders.
TMTG is set to receive around $1.3 billion from the merger agreement with Digital World, comprised of around $300 million in cash and a further $1 billion in so-called private investment in public equity, or PIPE funding, from its underlying investors.
Digital World needs at least 65% of its shareholders to approve the extension proposal during vote planned for Tuesday. An early September vote was ultimately postponed, and then scrapped, after failing to reach the 65% threshold.
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