Digital World Acquisition Corporation (DWAC) shares soared after an early loss Tuesday, when shareholders of the acquiring company specifically approved a one-year extension to take former President Donald Trump’s social media platform public.
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During the shareholder meeting held at 12 noon on Tuesday, the DWAC informed investors that more than 65 percent needed to approve the question voted in favor of extending the deadline.
The decision to approve the extension by investors came after Trump announced he would run for president in 2024.
DWAC stock rose 9% on Tuesday after falling 1.3% in the previous period market trading. On Monday, shares pared losses, edging higher late in the session after Elon Musk reinstated Trump’s Twitter account on Sunday.
DWAC General Meeting of Shareholders
In early November, DWAC stock spiked after SPAC delay a shareholder vote – sixth – on whether to approve a one-year extension to finalize the merger with Trump Communications and Technology Corporation. Trump Media is the parent company of conservative social media platform Truth Social.
The shareholder meeting was adjourned until Tuesday, November 22, where SPAC finally announced that shareholders voted in favor of extending the deadline until September 8, 2023.
The deadline for DWAC to finalize the merger with Trump’s company was initially early September 2022. However, SPAC has stated that a Securities and Exchange Commission investigation into the transaction did not. delay the proceedings.
With DWAC shareholders failing to complete the September vote, SPAC’s sponsor, ARC Global Investments, contributed approximately $2.9 million to extend the merger deadline through December 8. , according to federal records.
DWAC has warned investors that if not granted a one-year extension, the company is likely to cease operations and liquidate shares.
In an SEC document, the DWAC revealed that between September 19 and September 23, it received termination notices from private investors in public equity (PIPE) representing approximately 139 million dollars. In its quarterly report on August 23, the company said it lost $6.2 million in the first half of this year. And according to the most recent filing, it is continuing to lose millions of dollars.
DWAC Stock And The Trump Brand
DWAC is a special-purpose acquisition company trying to bring the former president’s tech and social media platforms public in the sort of reverse merger that was popular a few years ago. The company reported last week that it had continued to bleed money. SPAC said it lost about $3.4 million in the most recent quarter ended September 30, according to SEC filings. On Tuesday, the group confirmed that it has lost more than $10 million through 2022, according to federal filings.
The future of DWAC and efforts to bring Trump Technology and Media Corporation to the public is tied to the values of the Trump brand. Another presidential bid is seen as a big hit for the brand.
DWAC stock fell last week after Trump officially announced that he would once again seek the Republican nomination as the presidential candidate in 2024. It was a turning point after DWAC stock. increase about 70% in early November when news broke that Trump’s presidential run was imminent. DWAC stock is now up about 50% in November.
DWAC stock also fell after the midterm elections, when Republicans fell short of expectations. The performance was seen by some as a repudiation of Trump-backed candidates. In the face of doubts about the midterm election results, another presidential run is the most obvious short-term path to strengthening the appeal of the Trump brand.
Musk and Trump’s love affair
On Friday night, Tesla (TSLA) CEO Elon Musk, who took over Twitter on October 28, posted a poll from his account asking members of the public to consider whether to reinstate Trump’s account. are not. 24 hours later, Musk tweeted that “everyone has spoken. Trump will be reinstated.”
The Twitter poll appears to have over 15 million responses with 51.8% of the vote favoring Trump returning to Twitter.
However, Trump has said he will not return to Twitter.
“I don’t see any reason for that, they have a lot of problems at Twitter, you see what’s going on. It may work, it may not work,” Trump said during the regular leadership meeting. anniversary of the Republican Jewish Union on Saturday .
Trump also signaled on Truth Social that he would stick with his social media platform and not start tweeting.
“Vote positively now, but don’t worry, we’re not going anywhere. Truth Social is very special!” Trump wrote on Saturday, referring to Musk’s Twitter poll.
Musk appeared to have responded on Twitter on Sunday, posting an image depicting a woman, representing Twitter, and a priest, representing Trump.
“And let us not be tempted,” the billionaire wrote.
DWAC stock with Musk in charge of Twitter
The recent volatility in DWAC stock comes as Musk takes the helm of Twitter, changing the way the social media platform works.
Musk has almost halved the social networking site’s staff while regularly tweeting about his political plans and views. Musk has also directly responded to customer complaints and suggestions. There was widespread confusion about the verification features being implemented and there was speculation that the company might go bankrupt.
On Friday, Musk tweeted “Twitter’s new policy is free speech, but not free access.”
Musk said “negative/hate tweets” will have monetization disabled and other users won’t be able to find the tweet unless they specifically search for it. Musk added that this only applies to tweets, not accounts.
Musk’s focus on Twitter is taking its toll on Tesla stock, According to some analysts. Tesla stock is up about 20% since Musk took over Twitter on October 28. On Tuesday, Tesla stock rose 0.6% after falling 6.8% on Monday.
Musk also sold 19.5 million Tesla shares for $3.95 billion on Nov. 4, 7 and 8. His decision to sell some Tesla shares came just days after Musk completed a $44 billion purchase of Twitter.
Last week, Musk testified in a Delaware court to defend himself in a shareholder lawsuit.
While testifying, Musk said he hopes to “reduce my time at Twitter and find someone else to run Twitter over time,” according to news reports.
DWAC stock soars
Truth Social launched after Twitter closed Trump’s account following the January 6 riots at the US Capitol. Some industry observers have suggested that a return to Twitter could redirect a large portion of Truth Social’s audience to a more mainstream channel.
DWAC stock is down about 87% from October 22, 2021, peaking at 175, marked shortly after news of the Trump merger deal broke.
Please follow Kit Norton on Twitter @KitNorton for more insurance.
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