Donald Trump may be one of the biggest politicians on the scene, with some of the most virulent supporters of any of them, yet even he has had trouble keeping his Twitter-like Truth Social in the black. But a new vote among shareholders has handed Trump’s social media company a big victory and brought it back from the precipice.
Truth Social has been working to go public, so that private people can invest in the company, but it has been experiencing some troubles getting the deal done. On Tuesday, the social media group faced a crucial vote that could have spelled doom if it went the wrong way.
The merger of Trump Media & Technology Group and Miami-based special-purpose acquisition company Digital World Acquisition Corporation faced a crucial shareholder vote on Tuesday. Either shareholders were to vote to extend the deadline to complete the stalled merger, or Digital World Acquisition Corporation would be forced to liquidate and return the $300 million it had raised for its attempt, Forbes reported.
If the latter happened and DWAC folded, it would prevent Truth Social from going public, and that would have meant continuing funding issues.
Digital World needed 65 percent or more of its 400,000 shareholders to cast their vote before Friday to extend the merger deadline and, according to Axios, the vote was in Truth Social’s favor.
One problem the DWAC faced is that most of its shareholders are small investors who likely invested in Truth Social because they are fans of the former president, Forbes reported. DWAC went all in on a campaign to alert the shareholders to the vote for fear that most of them were not even aware of how crucial the vote was supposed to be.
Showing the troubles the merger has faced, it is already the second time that the one-year deadline was extended, Axios reported.
DWAC’s shares climbed after Tuesday’s news, but it is still lower than it was at its height.
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The merger has been troubled as federal SEC regulators slapped them with an $18 million penalty after the agency accused the company of having backroom talks with TMTG ahead of the merger, which is a violation of the law. A former member of DWAC’s board was also recently arrested and charged with insider trading, which put further pressures on the company’s stock.
Also, Digital World’s former CEO, Patrick Orlando, was removed by the board because the merger with Truth Social has faced such a rocky road, CNBC reported in March.
Despite having a strong launch, Truth Social has struggled to grow since its launch in February 2022.
The social media site reportedly has about 10.1 million visits, according to web traffic analysts at Similarweb. But as Forbes noted X, formerly known as Twitter, has 6.5 billion visits, and Facebook has 17.4 billion, meaning Truth is tiny.
Forbes also noted that Truth Social has lost value.
“We estimated Trump’s net worth at $2.5 billion in April. That’s a roughly $700 million decline from last fall, largely because his social media business has fallen,” the outlet reported.
All this doesn’t mean that the merger will be successful, and its rocky history is not a great sign. But Truth Social really needs this merger for an infusion of cash. If the merger is successful, DWAC will be able to give Truth Social a $300 million cash infusion, according to Market Watch.
DWAC has reiterated its dedication to the merger.
“We believe in the value and prospects we bring to the table and to a true democracy in the United States, and with the continued support of our shareholders, we can navigate this challenge successfully and potentially complete the proposed business combination with Trump Media and Technology Group Corp., which we know so many of our stockholders believe in,” DWAC Chief Executive Eric Swider wrote to shareholders in late August, Market Watch noted.
Regardless, the victory DWAC’s shareholders delivered on Tuesday was a shot in the arm for Trump’s social media group.
This article appeared originally on The Western Journal.