DWAC's stock takes a dive after merger with Trump Media approved by shareholders

By Tomi Kilgore

SPAC's stock surged ahead of the voting results, then turned sharply lower after results were reported

Shares of Digital World Acquisition Corp. took a dive Friday, as the special purpose acquisition vehicle's proposed purchase of former President Donald Trump's social-media company reportedly received shareholder approval.

The stock (DWAC) sank 5.8% in morning trading, reversing an earlier gain of as much as 12.1%, as news of the approval was reported.

It's been a long time coming. The reverse-merger agreement, in which DWAC would take privately held Trump Media & Technology Group Corp. public, was first announced on Oct. 20, 2021.

It has been a bumpy road since then, as the blank-check company has dealt with a number of challenges, including those from the U.S. Justice Department, the Securities and Exchange Commission and its former chief executive, as well as risks associated with Trump's legal proceedings.

The approval, as The Wall Street Journal reported, puts Donald Trump in line for a roughly $3 billion windfall. But keep in mind that the money from a merger will not be available for Trump to use for at least six months.

Also read: A Truth Social windfall likely won't solve Trump's immediate financial crisis.

Ahead of the shareholder vote, the stock got a nice bump earlier this week after DWAC sued former Chief Executive Patrick Orlando's investment vehicle, saying it was contractually obligated to vote in favor of the merger. That was after ARC Global Investments LLC had sued DWAC seeking to block the merger unless it was awarded a larger number of shares than what was proposed.

DWAC's stock has dropped 21% from its January peak, but has still rocketed 130% year to date, as it got a big boost from Trump's victories in Republican presidential caucuses in January.

-Tomi Kilgore

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03-22-24 1122ET

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