Digital World Acquisition Corp. – the special purpose acquisition company (SPAC) that Truth Social needs to go public – revealed in a Filing with the Securities and Exchange Commission On Friday, investors waived $139 million in commitments of the $1 billion previously announced by the company.
There’s probably more to come. Investors, who agreed to provide the money almost a year ago, can now waive their commitments because Digital World missed its original September 20 deadline to merge with Truth Social.
DWAC is extend the term of the agreement by three months after shareholders refused to approve his offer for a 12-month extension. But investors can still pull back.
This is just the latest issue for Digital World and Truth Social.
A key supplier complained last month that Truth Social’s bills weren’t paid. A major web hosting operator said Social truth owed approximately $1.6 million in contractually obligated payments, with an allegation suggesting that the finances of the operation are in “significant distress“, Fox Business News reported.
In another setback, Truth Social’s the trademark application was rejected last month because its name sounded too similar to other operations.
Truth Social is not the juggernaut some investors were hoping for. The social media platform is largely a forum for Trump, who repeatedly posts bragging posts and reposts right-wing media articles praising him every day.
Comments in response mostly involve QAnon, pro-Trump and anti-Trump conspiraciesJoe Biden memes and grumpy comments like: “Ode to the greatest president of all time.”
The comments lack the back and forth from social media platforms like Twitter that make it more of a dialogue. Most negative comments on Truth Social are buried or disappear from the site, whose organizers promised it would be censorship-free.
Trump started Truth Social after being kicked off Twitter following the January 6, 2021 riot at the United States Capitol. Trump used the platform as he did Twitter – to rail at haters, complain about being victimized and falsely insist he won the 2020 presidential election.
Last month, Digital World warned in a Filing with the SEC one Trump’s decline in popularity could hurt the company. The filing noted that the success of Truth Social hinges on the “reputation and popularity” of the inquiry-ridden Trump, who chairs the Trump Media and Technology Group, which owns and operates the social media platform. .
“To be successful, TMTG will need millions of these people to register and regularly use TMTG’s platform,” the filing warns. “If President Trump becomes less popular or there are other controversies that harm its credibility or people’s desire to use a platform associated with it,” the planned merger with Digital World “could be negatively affected,” he warned. .