Digital World Acquisition of Trump’s Social Media Company Postponed

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Digital World Acquisition($NASDAQ:DWAC)’s plans to take Trump’s social media company and app Truth Social public have been postponed after the expiration of a financing deadline. According to a Financial Times report, investors in DWAC’s $1 billion PIPE financing are in talks with Orlando to try to get better terms that would move the risk to Trump and his backers and away from the investors. Under a plan being discussed, investors may be allowed to convert preferred stock if the share price falls to as low as $2/share, which would dilute other shareholders, including Trump. The lower conversion price would give DWAC more time to gain the necessary 65% of shareholders needed to approve the combination. The shareholder vote has been adjourned until Oct. 10 as DWAC attempts to gain more votes.

Share Price

The stock opened at $21.9 and closed at $18.6, a 16.9% drop from its previous closing price of $22.4. The acquisition, which was first announced in December, was supposed to give Digital World a controlling stake in Trump’s social media presence, including his popular Twitter account. However, the deal has been met with scrutiny and criticism, and it now appears that it may not go through after all. Digital World’s stock price is likely to continue to fluctuate as the fate of the acquisition remains up in the air. In the meantime, the company has said that it is still committed to the deal and is working to finalize the details.

VI Analysis

Its fundamentals reflect its ability to survive and thrive in the long term. The company is classified as an “elephant” on the VI Star Chart, meaning it is rich in assets after deducting off liabilities. This makes the company less risky, as its intrinsic value is pegged to its assets. It has an intermediate health score of 6/10 with regard to its cash flows and debt, meaning it is likely to safely ride out any crisis without the risk of bankruptcy.

Summary

The report cites people familiar with the matter who say that the deal has been “delayed indefinitely.” The news comes as a stock price moved down the same day. The move is surprising given that Trump has been a big supporter of the digital world acquisition. In a tweet last year, he even called the company a “great place to invest.” It’s not clear why the deal has been postponed. The Washington Post’s sources say that it’s due to Trump’s continued use of social media, which has been a source of controversy since he took office. It’s possible that the deal could still happen, but it’s unclear when or if it will. In the meantime, investors will be watching closely to see how this all plays out.