Digital World Acquisition Corp. (DWAC) Shares soared after early losses on Tuesday as shareholders of the special acquisition company approved a one-year extension to the deadline to go public on the former’s social media platform. President Donald Trump.
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At a general meeting of shareholders held at 12 p.m. Tuesday, DWAC informed investors that more than 65% needed to approve the matter had voted in favor of extending the deadline.
Investors’ decision to approve the extension comes after Trump announced he would run for president in 2024.
DWAC stock jumped 9% on Tuesday after falling 1.3% in previous market trades. Shares pared losses on Monday, rising at the close after Elon Musk reinstated Trump’s Twitter account on Sunday.
DWAC Shareholders’ Meeting
In early November, DWAC stock surged after SPAC delayed a shareholder vote – for the sixth time – on whether to approve a one-year extension to complete its merger with Trump Media and Technology Group. Trump Media is the parent of the conservative social media platform Truth Social.
The shareholders’ meeting was adjourned to Tuesday, November 22, when SPAC finally announced that shareholders had voted in favor of extending the deadline to September 8, 2023.
DWAC’s deadline to complete its merger with Trump’s company was originally set for early September 2022. However, SPAC said a Securities and Exchange Commission investigation into the deal had delayed proceedings.
With DWAC shareholders failing to vote in September, SPAC sponsor ARC Global Investments contributed about $2.9 million to extend the merger deadline to Dec. 8, according to federal filings.
DWAC had warned investors that if the one-year extension was not granted, the company could potentially cease trading and liquidate its shares.
In an SEC filing, DWAC disclosed that between Sept. 19 and Sept. 23, it received termination notices from private equity investment (PIPE) investors totaling some $139 million. In its August 23 quarterly report, it said it lost $6.2 million in the first half. And according to his most recent record, he continues to lose millions of dollars.
DWAC Stock and the Trump Brand
DWAC is a special-purpose acquisition company trying to take the former president’s technology and social media platform public in the type of reverse merger that was popular several years ago. The company announced last week that it continues to hemorrhage money. SPAC said it lost about $3.4 million in the most recent quarter ending Sept. 30, according to SEC filings. On Tuesday, the group confirmed it had lost more than $10 million so far in 2022, according to federal documents.
The future of DWAC and its efforts to publicize Trump Media and Technology Group is closely tied to the value of the Trump brand. Another presidential bid is seen as a big boost for the brand.
DWAC stock fell last week after Trump officially announced that he would seek the Republican nomination again as the presidential candidate in 2024. It was a turnaround after DWAC stock had jumped about 70% in early November on news of Trump’s impending presidential bid. DWAC stock is currently up around 50% in November.
DWAC stock also fell after the midterm elections, with Republicans falling well short of expectations. The performance was read by some as a repudiation of Trump-backed candidates. Given the doubts raised by the midterm results, another presidential race is the clearest path in the short term to bolster the appeal of the Trump brand.
The Musk and Trump Affair
Friday night, You’re here (TSLA) CEO Elon Musk, who took over Twitter on October 28, posted a poll from his account asking members of the public to weigh in on whether Trump’s account should be reinstated. Twenty-four hours later, Musk tweeted that “people have spoken. Trump will be reinstated.”
The Twitter poll appeared to have more than 15 million responses with 51.8% of votes in favor of returning Trump to Twitter.
However, Trump said he would not return to Twitter.
“I don’t see any reason for that, they have a lot of problems on Twitter, you see what’s going on. It may do it, it may not,” Trump said at the Coalition’s annual leadership meeting. Republican Jew on Saturday. .
Trump also signaled on Truth Social that he would stick to his social media platform and not start tweeting.
“Vote with positivity now, but don’t worry, we’re not going anywhere. Truth Social is special!” Trump wrote on Saturday, referring to Musk’s Twitter poll.
Musk apparently responded on Twitter on Sunday, posting an image of a woman, representing Twitter, and a priest, representing Trump.
“And lead us not into temptation,” the billionaire wrote.
DWAC Stock with Musk in charge of Twitter
The recent volatility in DWAC shares comes as Musk took over Twitter, changing how the social media platform works.
Musk has cut about half of the social media site’s staff while tweeting frequently about his plans and politics. Musk also responded personally to customer complaints and suggestions. There has been widespread confusion over the rollout of verification features and there is speculation that the company could go bankrupt.
On Friday, Musk tweeted “Twitter’s new policy is freedom of speech, not freedom of access.”
Musk said “negative/hateful tweets” would be demonetized and other users couldn’t find the tweet unless they specifically searched for it. Musk added that this only applies to tweets and not accounts.
Musk’s focus on Twitter is hurting Tesla stock, some analysts say. Tesla shares are up around 20% since Musk took over Twitter on Oct. 28. On Tuesday, Tesla stock rose 0.6% after falling 6.8% on Monday.
Musk also sold 19.5 million Tesla shares for $3.95 billion on November 4, 7 and 8. The decision to sell some of his Tesla shares came just days after Musk completed his $44 billion purchase of Twitter.
Last week, Musk testified in a Delaware court to defend himself in a shareholder lawsuit.
During his testimony, Musk said he expected to “reduce my time on Twitter and find someone else to manage Twitter over time,” according to reports.
DWAC stock far from highs
Truth Social was launched after Twitter shut down Trump’s account following the January 6 riot at the United States Capitol. Some industry watchers say a return to Twitter could redirect much of Truth Social’s audience to the more mainstream channel.
DWAC stock is down about 87% from its high of 175 on Oct. 22, 2021, marked just after the announcement of the merger deal with Trump.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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