Trump’s Truth Social-Linked SPAC in Talks to Return Another $533 Million to Investors

Digital World Acquisition Corp., the company planning to take former President Donald Trump’s Truth Social platform public, is in discussions to return investors remaining $533 million commitment, the company said on Thursday.

Digital World, a special acquisition company (SPAC), went public in September 2021 and shortly thereafter announced the proposed merger with Trump Media & Technology Group Corp., which operates Truth Social. SPACs are "blank-check" investment pools aimed at acquiring operating companies to take them public.

If the investment were to be canceled for good, it would mark the end of Digital World’s private investment in a public equity (PIPE) transaction worth $1 billion, Reuters first reported. A total of $467 million of the PIPE has already been canceled, according to regulatory filings.

In response to Reuters’ reporting that the end was near for the contentious deal, Truth Social said in a post on its own platform that both Digital World and Truth Social agreed that terminating the PIPE is a “key step” towards the completion of the merger and that it did not signal that the companies were backing away from the deal. 

A spokesperson did not respond to Reuters’ questioning about why terminating the PIPE ahead of the merger would be positive for Trump Media, the outlet said.

Trump Media CEO Devin Nunes, a former Republican congressman from California, said in a statement he believes the elimination of the PIPE “would be in the best interest of [Trump Media’s] equity holders and completing our merger with [Digital World] as soon as possible." 

Last month, shareholders voted to ward off a forced liquidation of Digital World, which would have been required under federal rules had an extension to the proposed deal not been approved by shareholders. 

The merger also drew scrutiny from the Securities and Exchange Commission, which imposed an $18 million penalty on the SPAC for misleading “investors and the SEC by failing to disclose that it had formulated a plan to acquire and was pursuing the acquisition” of Trump Media prior to its initial public offering in September 2021.

Truth Social was started by Trump as a right-wing alternative to Facebook and Twitter, which had both banned the former president after the January 6 riots in Washington, D.C.