Special Purpose Acquisition company (SPAC) Digital World Acquisition Corp. (DWAC) disclosed on Monday, Financial Regulators probing its deal with Trump's Social Media Firm have sought More Information, while warning this could potentially Delay the Deal. Shares of the SPAC, which have Lost nearly 15% so far this year, were down about 10% in Premarket Trading.
DWAC signed a Deal in October, 2021, to merge with Trump Media & Technology Group Corp (TMTG), the Creator of the Social Media platform Truth Social.
The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FIRA) have been Investigating the Deal since late last year.
The Regulators have asked for additional Documents on Due Diligence of potential Targets other than TMTG, Relationships between DWAC and other Entities, including ARC Global Investments and Advisors.
They had earlier sought Documents on:
- Early Communications between DWAC and TMTG, maybe Violating SPAC Laws
- Meetings of DWAC's Board
- Policies and Procedures relating to Trading
- The Identification of Banking, Telephone, and email Addresses
- The Identities of certain Investors.
The Company said the Regulators' latest Action could Delay the SPAC Deal, which was expected to Close in the Second half of this year.
Trump indicated a New Large Investment in TWTG, but that Investment will not take place if the Merger isn't completed.
SPAC's have between 18 and 24 months to complete the Merger. Failure to Merge, causes the SPAC to return the Investments
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