SPAC Taking Trump’s Social Media Platform Public Isn’t Paying Its Bills, Heightening Investor Fears That Deal Falls Through
The DWAC CEO reportedly told the consultant, Saratoga Proxy Consulting, that they did not have the funds to pay them, causing investors to panic and DWAC stock to plummet.
Digital World Acquisition Corp. (NASDAQ: DWAC), the special purpose acquisition company (SPAC) planning to take Trump Media & Technology Group (TMTG) public, is being accused by a consultant of failing to pay money owed to them for assisting DWAC with its recent shareholder vote, which failed to move the merger forward. The DWAC CEO reportedly told the consultant, Saratoga Proxy Consulting, that they did not have the funds to pay them, causing investors to panic and DWAC stock to plummet.
The shareholder vote, which ultimately failed, resulted in the SPAC pushing back the deadline for the merger. They hope to hold another shareholder vote before the new deadline, but the likelihood of this second vote being successful is likely lower than the first vote. Now that a consultant specifically hired to get a yes vote has failed and subsequently been stiffed by Digital World Acquisition Corp., another company stepping in and getting a positive vote is highly unlikely.
None of this should come as much of a surprise to anyone who has followed Donald Trump’s career before he entering politics. Throughout most of his career, Trump was known as someone who would seek any opportunity to get out of paying someone the money owed to them. Trump has been accused by everyone from construction companies to personal lawyers of stiffing them when his bill came due.
What’s also par for the course is what appears to be the inevitable implosion of the deal. Trump has left a long line of failed businesses in his wake (Trump Steaks, Trump Airlines, Trump Casinos, etc.); the failure of the DWAC merger and, perhaps, the eventual shuttering of Truth Social would be another in a long list of failed business ventures.
The success of Truth Social, the Trump Media and Technology Group and the DWAC merger hinged on the public’s perception of Donald Trump. Now that his approval rating is cratering, people are becoming less likely to vote for him, much less support his side projects. This is the primary risk when investing in a cult of personality. Investors should consider alternative investments to DWAC that are less risky and park their money in a company that can stand on its product, not its leader’s fame (infamy?).
Looking at yesterday’s IPO of Rumble (NASDAQ: RUM), which gained over 35% on its opening trading day, while shares of DWAC plummeted almost 10% on Monday, it seems logical to assume that many DWAC investors jumped ship and moved their money into Rumble.
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