Donald Trump’s social media company is facing further financial troubles after a long awaited $1.3bn cash injection set to be derailed due to lack of investor backing.
Trump Media and Technology Group is the company that launched the ex-president’s Truth Social platform. The $1.3bn cash infusion from Digital World Acquisition Corp has been on hold since last October due to civil and criminal investigations into the circumstances around the merger. The Nasdaq listed acquisitions company requires the support of 65% of shareholders, who are mostly individual investors, for the extension it needs to try to secure the deal.
Most likely the outcome of the vote will be announced at a special shareholder meeting on Tuesday. Digital World executives do not believe they will be able to muster enough shareholder support in time and have started to consider alternative options, Reuters reported.
If Digital World fails to come up with a stopgap solution before Tuesday’s shareholder meeting, it will be forced to liquidate its shares and return the money it raised in its initial public offering.
Digital World, a so-called blank check company created specifically for the purpose of acquiring or merging with an existing business, has previously said that Trump’s media group has “sufficient funds” until April 2023.
Trump has more than 4 million followers on Truth Social, where has been posting since April, which is just a fraction of the 89 million he had on Twitter. Twitter and Facebook banned Trump after his supporters staged the deadly January 2021 attack on the US Capitol in a desperate attempt to prevent the congressional certification of his defeat to Joe Biden in the previous year’s election.
The app is currently available to download on Apple’s app store, and it was recently banned from Google Play where the vast majority of apps are downloaded for Android users. Google said the platform violates its policies on banning content that involves physical threats and could incite violence.
It is unclear how Trump’s media company has been operating without access to Digital World’s funding, but last week it said that Truth Social is “on strong financial footing” and would soon begin running advertisements.
