SPAC Digital World Acquisition extends deadline for Trump social media company deal

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On Tuesday, shares of SPAC Digital World Acquisition($NASDAQ:DWAC) Corp plunged 11% after the company adjourned a meeting to try and gain additional support for a one-year extension of its deal to take Trump’s social media company public. However, in after hours trading on Tuesday, DWAC shares rose 3.4% after the company said it would extend the time it needs to complete the deal by three months. ARC Global Investments II, the sponsor of DWAC, said that if the Thursday vote fails to lead to an extension of the deal, it plans to contribute $2.88 million to DWAC’s trust account to extend the time to consummate an initial business combination for a three-month period, until December It remains to be seen whether or not this will affect DWAC’s market and earnings in the long term. However, the company’s decision to extend the deadline for the deal suggests that it is still confident in its ability to complete the transaction.

Market Price

The company’s stock opened at $19.7 on Tuesday and closed at $22.1, up more than 10 percent from the previous day. Digital World Acquisition said it is “in advanced discussions” with the Trump-founded company and is “confident” that it will be able to reach a deal. The extended deadline gives the two sides more time to negotiate the terms of the deal, which is expected to be worth several hundred million dollars. If the deal goes through, it would give the Trump-founded company a major boost in visibility and reach, as well as access to Digital World Acquisition’s large database of users.

VI Analysis

Digital World Acquisition Corp is a holding company that focuses on acquiring businesses in the digital media and technology industries. The company’s fundamentals reflect its long-term potential, and the VI Star Chart shows that it is classified as an “elephant,” a type of company that is rich in assets after deducting off liabilities. Such company is deemed less risky as the intrinsic value is pegged to its assets. Digital World Acquisition Corp is strong in cash flow, and weak in asset, dividend, growth, and profitability. It has an intermediate health score of 6/10 considering its cash flows and debt, and is likely to sustain future operations in times of crisis.

Summary

The company said in a filing with the Securities and Exchange Commission that it has until Feb. The original deadline was Jan. Digital World Acquisition is a special purpose acquisition company, or SPAC, that went public in October. A SPAC is a shell company that raises money in an initial public offering with the intention of acquiring another company.