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Trump’s Truth Social SPAC deal delayed, DWAC stock declines

Yahoo Finance Live anchors discuss DWAC stock performance as former President Trump's Truth Social SPAC deal is delayed.

Video Transcript

BRIAN SOZZI: All right, we're also watching-- we continue to watch shares of Digital World Acquisition Corp. After a request to extend the deadline for the merger between former President Donald Trump's Truth Social platform and the special purpose acquisition company, could not gather shareholder support. Julie, another flubbed SPAC here.

JULIE HYMAN: Another flubbed SPAC, but obviously, there's a different flavor for [INAUDIBLE].

BRIAN SOZZI: There's a different flavor.

JULIE HYMAN: --because of who's involved with this one. This has faced some issues not quite from the beginning, but nearly from the beginning here. There are various investigations into this back deal. And now there's talk about delaying this vote deadline. It needs 65% of shareholders, though, to support an extension of the deadline.

As a reminder here because we don't talk about SPACs as much as we did a year ago at this time, special purpose acquisition companies, they are created as blank check companies to then go out and buy something. But they have a certain amount of time. Typically it's written into, when they're created, how long they're going to have to buy something. Now, even though this company has already declared what it is going to buy, it still has a specific amount of time to do so.

And if it runs out, it has to get shareholders to approve it. Not clear it's going to get that. By the way, the stock action here, the high on this stock was $175.

BRIAN SOZZI: Well, that's because Truth Social was going to compete with Twitter for users.

JULIE HYMAN: Right.

BRIAN SOZZI: And take it over.

JULIE HYMAN: And that has definitely not materialized. All of Twitter shares-- all of Twitter's troubles notwithstanding, still seems to me better than Truth Social.

BRIAN SOZZI: I'm still waiting to get my approval to join and start getting involved with Truth Social, which I will not be doing for numerous reasons.