Could Donald Trump's SPAC Deal Fall Apart? Here Are The Stakes

Zinger Key Points
  • Failure to close the deal by its March deadline would result in liquidation.
  • The recent FBI raid at Mar-a-Lago could also put pressure on the SPAC.
Could Donald Trump's SPAC Deal Fall Apart? Here Are The Stakes

One of the best-performing stocks of 2021 was a SPAC merger between former President Donald Trump’s media company and the parent company of his social media platform, Truth Social.

In 2022, however, the scenario has changed. Shares have fallen and could see further downside based on an upcoming shareholder vote.

What Happened: Digital World Acquisition Corp DWAC, which owns Truth Social, announced a SPAC merger with Trump Media & Technology Group in 2021. If the merger goes through, the combined entity would go public.

The SPAC sold 28.75 million shares in its initial public offering (IPO) counting over-allotment at $10 each.

However, Digital World recently announced a vote to extend the merger deadline one year to Sep. 8, 2023. The original deadline was Sep. 8, 2022.

Digital World Acquisition is largely held by retail traders and could struggle to generate enough votes for the extension. Without the one-year extension, the company has the ability to extend the deadline to March 8, 2023.

Failure to close the deal by the March deadline would result in liquidation.

“Digital World will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the public stockholders,” according to a public filing.

Along with the extension deadline vote, Digital World also plans to delay its earnings report.

“The registrant is unable to file its Form 10-Q for the quarterly period ended June 30, 2022 within the prescribed time period without unreasonable effort or expense because additional time is needed to prepare the financial statements,” an SEC filing reads.

The company currently has a net loss of $4.7 million in the quarter ending June 30, 2022 compared to a net loss of $740 in the quarter ending June 30, 2021.

Related Link: 7 Key Takeaways From The Donald Trump SPAC Deal 

Why It’s Important: Digital World CEO Patrick Orlando is behind several SPACs and already had one liquidate its shares. Yunhong International announced in November that it would liquidate after failing to find a business combination. The liquidation was valued at around $10.31 per share.

Shareholders as of record on Aug. 12 will vote on the extension with a tentative date set of Sep. 6, 2022 to approve the one-year extension.

The Digital World Acquisition SPAC deal has faced setbacks from the start with delays in reports filed and also several investigations. The company has been tied to SEC and Department of Justice investigations, which could delay the merger getting approved. With a shortened window to get the deal to close, liquidation could become a major concern and shares could fall closer to the $10 value they would be worth in this event.

Kerrisdale Capital and former hedge fund manager Whitney Tilson are among the vocal critics of the deal ever getting approved.

“We believe $DWAC will never secure regulatory approval to close its proposed merger with Trump Media & Tech Group,” Kerrisdale previously said.

Tilson highlighted the potential violations by the company of not disclosing it held talks with a merger partner prior to the IPO.

“If the SEC acts, the reason it will cite is that there were discussions between DWAC’s CEO and representatives of Trump before DWAC’s initial price offering, which is forbidden,” Tilson said. “Mark my words, there’s no way the SEC allows this to go through.”

Legal Woes: The recent FBI raid at Mar-a-Lago also puts pressure on the SPAC. Investors, including those in the PIPE on the deal, may reconsider supporting the company.

The September merger extension vote remains a key catalyst for the company and could be a cause for alarm if the vote is not approved.

Trump is also under investigation for his role in the Jan. 6 attack on the U.S. Capitol building.

See Also: The Full List Of Donald Trump's Legal Woes Ahead Of Possible 2024 Presidential Run

DWAC Price Action: Digital World Acquisition shares are trading at $30.55 on Wednesday versus a range of $22 to $101.87 over the last 52 weeks.

Image: Shutterstock

Posted In: DOJDonald TrumpKerrisdale CapitalPatrick OrlandoPresident Donald TrumpSPACSPACsTrump Media & Technology GroupTRUTH SocialWhitney TilsonM&APoliticsSmall CapSECTrading IdeasGeneral

11 Best Black Friday Deals on Amazon

11 Best Black Friday Deals on Amazon

The best Black Friday deals from Amazon are still coming hard and fast because the holiday is not yet upon us and the mega-retailer prefers to keep consumers on the hook for as long as possible—spending as much money as possible. 

To that end, here are some of the best Black Friday deals from Amazon that you might want to consider today.

Calphalon 10-Piece Pots and Pans Set

Regular Price: $172

Sale Price: $138.88

Calphalon’s 10-Piece Pots and Pans Set is designed with stainless steel, stay-cool handles along with pour spouts. The nonstick surface is PFOA-free and built with hard-anodized aluminum that is both durable and conducts heat extremely well. The set includes 2 fry pans, a sauce pan with cover, saute pan with cover and large stock pot with cover.

Apple AirPods 2nd Generation

Regular Price: $144

Sale Price: $85.49

The 2nd Generation AirPods from Apple connect to all Apple devices and give you an enhanced listening experience. Plus, they come with a case that keeps them safe and allows you to charge them in a secure environment. With over 24 hours of battery life, access to Siri and easy setup, you can start listening to your favorite tunes or podcasts today.

Adidas Ultraboost 21 Running Shoes

Regular Price: $129.98

Sale Price: $89.98

The Adidas Women’s Ultraboost 21 running shoe is perfect for anyone who likes a short run, maybe a 5K, half marathon or more. Coming in several colors and styles, you can slip these shoes on, enjoy the cushioned outsole, sink into the supple insole and secure laces.

Ninja AF101 Air Fryer

Regular Price: $129.99

Sale Price: $97.83

The Ninja AF101 Air Fryer allows you to crisp, roast, reheat and even dehydrate food products faster and cheaper than ever before. It has a 4-quart capacity and offers a wide temperature range along with several time settings so that you can customize each dish to your needs. Plus, all the parts are dishwasher safe.

Beats Solo3 Wireless On-Ear Headphones

Regular Price: $199.95

Sale Price: $99

Beats by Dr. Dre are among the best headphones on the market, and the Solo3 Wireless On-Ear Headphones include the Apple W1 chip, Class 1 Bluetooth and 40 hours of battery time. These headphones even have a built-in microphone and offer an adjustable fit so that you can be comfortable whether you’re listening to an Android or iOS device.

Hoover Power Scrub Deluxe Carpet Cleaner

Regular Price: $198.98

Sale Price: $175.98

The Hoover Power Scrub Deluxe Carpet Cleaner allows you to keep your home spotless and clean up after your pets. The cleaner comes with the Hoover Paws and Claws Deep shampoo and a storage mat to keep the floor dry once it’s put away.

LG CordZero Auto Empty Cordless Stick Vacuum

Regular Price: $999.00

Sale Price: $851.71

The LG CordZero Auto Empty Cordless Stick Vacuum and Wet Mop All in One Tower is designed to work in homes with several pets or children and clean up all the messes that life brings. The battery lasts up to 2 hours, and there’s an extra removable battery that gives you even more cleaning time and power.

Breville Fresh and Furious Blender

Regular Price: $278.60

Sale Price: $199.95

Breville, a top name in blenders and juicers, offers the Fresh and Furious Blender, featuring 50-ounce capacity, Vac Q technology, pre-programmed cycles, LCD display and lid with pull ring. With the Fresh and Furious Blender, you can make everything from a smoothie to a soup and everything in between.

Hot Tools Professional 2000 Turbo Ionic Hair Dryer

Regular Price: $89.99

Sale Price: $55.63

The Hot Tools Professional 2000 Turbo Ionic Hair Dryer is designed for professional use, but it works perfectly in the home. With 1875 watts of power, 6 heat and speed settings and a lightweight design, you can easily style your hair and utilize the diffuser, cut back on the frizz and stretch the 8 ft cord for maximum functionality.

Columbia Heavenly Long Hooded Jacket

Regular Price: $160

Sale Price: $97.38

The Heavenly Long Hooded Jacket from Columbia is designed to be light for everyday use, but it’s heavy enough to protect you from the cold. The plush fleece lining, security pocket, water resistant fabric, 2-way zipper, and zippered hand pockets make the jacket both protective and functional.

ConAir InfinitiPro Hair Dryer

Regular Price: $49.99

Sale Price: $29.99

ConAir is one of the biggest names in hair and beauty, and the InfinitPro is an 1875 watt hair dryer designed for professionals with ceramic technology. The dryer comes with a diffuser and concentrator, and it allows you to blow out your hair just the way they would at the salon.

Deals the Experts Are Hoping For

Experts believe that Amazon’s Black Friday sale could linger for quite some time. It all started with the Prime Early Access sale on October 11 and 12. Previously, Amazon has offered the “Epic Deals” sale that ran through late October. 

This is to say that any sale could come up at any time. 

Even so, those monitoring Amazon are looking forward to a few potential deals, including:

  • Apple Watch
  • AirPods (any generation)
  • MacBook Pro
  • Large, underpriced TVs
  • Amazon Echo
  • More small home appliances (Dyson or Shark vacuums, Instant Pots, etc.) 

While these predictions are based on last year’s Amazon Black Friday Sale, it’s important to remember that most Black Friday sales are fairly consistent and push the products that are most likely to sell.

 

Featured image sourced from Shutterstock

Posted In: Partner ContentGeneral