Digital World Acquisition Corp. extended its four-day decline to nearly 20% as a vote looms to delay its IPO.
The SPAC has agreed to merge with former President Donald Trump's social media company.
Trump defended the recent business performance of Truth Social, saying its business boomed after his Mar-A-Lago home was raided by the FBI.
Digital World Acquisition Corp. investors that were hoping to soon be owners of former President Donald Trump's Truth Social may have to wait a bit longer.
Shares of Digital World Acquisition fell as much as 10% on Monday, extending its four-day decline to nearly 20% as the company prepares for an imminent shareholder vote to delay its planned merger with Truth Social by up to a year.
The shareholder vote will begin tomorrow, and if the resolution is passed, it would give Digital World some breathing room just ahead of its scheduled merger with Truth Social on September 6.
Also hurting sentiment around Truth Social and its SPAC partner is a recent report that the company hasn't paid a $1.6 million bill to its hosting vendor. Meanwhile, Digital World warned in an SEC filing that if Trump's reputation and popularity decline, so could the business prospects of Trump's social media upstart.
"If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG's results of operations, as well as the outcome of the proposed Business combination, could be adversely affected," the filing read.
The disclosure from Digital World came after Trump's Mar-A-Lago home was raided by the FBI due to the alleged unauthorized storage of classified information.
But Trump is hitting back, arguing in a post from his Truth Social account that business has never been better for the company.
"The Fake News Media is devastated by how well TRUTH is doing so, quite on cue, they are working overtime to criticize and demean it. Actually, many of the big guns in Washington, D.C., are fighting to stop the TRUTH but, they won't be successful... They said it is doing worse since the [FBI] Raid, but actually it is doing MUCH better, up more than 550%," Trump posted to his account over the weekend.
The engagement numbers for Truth Social touted by Trump likely won't be fully known until the company merges with Digital World and goes public, and that may not happen for at least another year depending on the outcome of the shareholder vote.
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