A SPAC set to take Donald Trump’s media company public has been linked to troubles with finances and difficulties finalizing its merger. A filing reveals the company changed its mailing address and it could provide a hint of financial troubles.
What Happened: Digital World Acquisition Corporation (NASDAQ:DWAC) announced a SPAC merger to take Trump Media & Technology Group public in late 2021. The deal would bring the media company backed by former President Donald Trump public. Trump Media & Technology is the parent company of Truth Social, a free speech social media platform taking on the likes of Twitter and Facebook, two platforms that Trump has been banned from.
At the time of its merger announcement, Digital World Acquisition had an address of 78 SW 7th Street in Miami, Florida listed. The address was quickly found to be a WeWork office in Miami.
A filing from the SPAC on Friday, Sept. 23, 2022 shows the new mailing address as 3109 Grand Avenue in Miami, Florida. Financial Times discloses the address is a UPS Store that is located in a strip mall between a restaurant and nail salon.
A phone call to the UPS store by Financial Times confirmed that unit 450, which was listed on the address for the SPAC, is one of its mailboxes in the store.
The move to the UPS store could be a move to save cash as the company has struggled to pay bills in recent months. The SPAC previously paid $15,000 a month for office space and administrative support to a business affiliated with Patrick Orlando, the CEO of Digital World Acquisition, according to the report.
UPS stores, a unit of United Parcel Service (NYSE:UPS), charge around $50 per month for P.O. boxes in stores.
The report did not indicate if Digital World was paying for its office space from WeWork and UPS, both.
Related Link: Trump SPAC Merger Has Provisions For Presidential Run, Prison Time
Why It’s Important: The Digital World Acquisition deal to merge with Trump Media & Technology Group has faced several obstacles.
There are ongoing investigations by the SEC and a federal grand jury into the SPAC merger.
Both Trump Media & Technology and the SPAC have faced financial obstacles recently. Digital World Acquisition is said to owe a fee in the six figures to Saratoga Proxy Consulting, a group that was hired to generate support for the merger vote extension.
Trump Media & Technology unit Truth Social was reported to have stopped making payments to its web-hosting provider RightForge recently. Fox Business reported that RightForge was owed $1.6 million from Truth Social.
A shareholder vote for the SPAC merger extension was delayed to October after failing to generate enough votes to extend the vote deadline to complete the merger. Around 40% of public shareholders of Digital World Acquisition voted in favor of the merger vote extension. A 65% vote in favor is required to approve the extension of the merger deadline.
The SPAC merger agreement listed mentions of a previous history of bankruptcies by companies linked to Trump. The SPAC said, “there can be no assurances that TMTG will not also become bankrupt.”
An investigation in 2016 by USA Today highlighted numerous lawsuits filed against Trump and his company over not being paid for their work.
News of financial struggles by both companies comes as Digital World announced it lost $138.5 million in PIPE (private investment in public equity) funding out of a total of $1 billion after a deadline passed last week for investors to withdraw. PIPE financing could be restructured in the future, according to the company.
DWAC Price Action: Digital World shares are up 6.18% to $17.52 on Monday, versus a 52-week range of $9.84 to $175.
Photo: Courtesy of Gage Skidmore on flickr
