Some investors are backing Digital World Acquisition Corp's plan to acquire former U.S. President Donald Trump's social media firm Truth Social, the Blank-check firm said on Friday.
Digital World received termination notices from private investment in public equity PIPE investors, ending nearly $139 million in investments out of the $1 billion commitment it had previously announced.
If the deal is not completed, investors who signed the PIPE commitment are free to move their money after the Sept. 20, 2022 deadline.
Digital World did not reveal the investors that pulled out. One of the investors who have been terminated is Sabby Management, which had committed $100 million to the PIPE.
More investors could pull out in the next few weeks, sources said, because they can terminate anytime after the deadline. Sources said that many are waiting for DWAC to propose more preferred terms to PIPE investors. The deal between SPAC and Trump Media and Technology Group TMTG, which owns Truth Social, has been on ice due to civil and criminal investigations into the circumstances surrounding the agreement.
The SPAC had been hoping that the U.S. Securities and Exchange Commission would have given its blessing on Digital World's disclosures on the deal. Digital World announced this month it would extend the deal's life by three months after its bid for a 12 month extension from its shareholders fell short.