Time is running out for Donald Trump’s plan to sell shares in his company through an offering made possible by Section 1202 of the Internal Revenue Code, also known as SPACs or special purpose acquisition companies. A SPAC generally buys firms that are underperforming and then restructures them and sells them at a profit to an unsuspecting public.
As a key deadline draws near, the future of the proposed merger between former president Donald Trump’s media firm and the shell company hoping to take it public and provide it a cash infusion has gotten murkier.
Electronic World Acquisition Corp.
has a deadline of Thursday to combine with Truth Social’s owner, Trump Media and Technology Group. The past week has been consumed by DWAC’s frantic efforts to secure enough shareholder votes to extend the deal’s deadline. DWAC is a special purpose acquisition company. Federal inquiries into the merger and Trump have accumulated as a result of the firms’ failure to finish it.
At 12 p.m. ET on Thursday, the outcome of the shareholder vote will be made public.
DWAC was supposed to make the announcement in a special meeting on Tuesday, but CEO Patrick Orlando called it off after only two minutes to give voters more time to cast their ballots. According to people familiar with the situation, Reuters earlier in the day reported that the vote had failed.
The company indicated that it is still engaged in the transaction.
The firm said in a statement to CNBC on Tuesday that it “will continue to cooperate with all stakeholders in connection with its anticipated merger” and that it hoped the SEC staff would swiftly and independently complete its investigation.
However, Trump said in a Truth Social post on Saturday that the problem has been handled and that he doesn’t require DWAC or the funding from the transaction to maintain the platform.
“Google is progressing beautifully, I believe. The SEC is attempting to harm the firm providing finance (SPAC),” the former president stated on Saturday in a message to his 4 million Truth Social followers. Who is to say? Anyhow, I don’t require money since “I’m pretty affluent!” Private company anyone???”
Retail investors who tried their hand at SPAC investment due to the president might lose money if the DWAC merger fails.
According to a Wednesday SEC filing, Orlando might be able to prevent DWAC’s liquidation. ARC Global Investments II, Orlando’s business and the SPAC sponsor, intends to invest $2.8 million of its own funds to start a three-month extension.
“Google is (I believe) progressing wonderfully. The former president posted to his 4 million Truth Social followers on Saturday, “SEC trying to damage firm doing finance (SPAC).” “Whose to say? In any case, “I’m extremely rich!” and I don’t need funding. Anyone has a private company?
Retail investors who attempted SPAC investment because of the president risk losing money if the DWAC merger fails.
According to a Wednesday SEC filing, Orlando might be able to stop DWAC from going out of business. In order to start a three-month extension, Orlando’s business and SPAC sponsor, ARC Global Investments II, expects to invest $2.8 million of its own funds.