Trump’s fall in popularity could hurt his social media, warns DWAC

In this image taken February 21, 2022, the Pravda social media logo is visible on a smartphone in front of former US President Donald Trump’s display.

Dado Ruvic | Reuters

Digital World Acquisition Corp., the specialist acquisition company that agreed to take the Trump Media and Technology Group public, warned on Monday that the potential damage to former President Donald Trump’s popularity could hurt his firm.

Came a warning securities announcement it set a shareholders’ meeting for September 6 to determine whether the deadline for completing the merger with Trump’s firm, which owns the Truth Social app, should be delayed. DWAC also said it could liquidate the company if the merger is not completed.

The deadline is currently set for September 8th. The company expects to extend it by a year until September 8, 2023.

“If President Trump becomes less popular or further controversy arises that damages his credibility or the desire of the people to use the platform associated with him and from which he will benefit financially, the results of TMTG’s operations, as well as the results of the proposed business combination, may suffer,” DWAC said in a statement.

Trump is currently under several investigations, including those related to the removal of records from the White House and the riots at the Capitol on January 6, 2021. He launched Truth Social after being banned from Twitter for his tweets on the day of the uprising.

DWAC said it was concerned that damage to the former president’s reputation could affect the value of the deal.

The filing also mentions surveys that have shown demand for Truth Social may be limited. “According to The Hill, only 30% of those surveyed would use a social media site associated with President Trump,” the statement said. “Furthermore, according to a poll published in The New York Post, only 60% of Republicans would use such a platform.”

Trump Media and Technology Group did not immediately respond to a request for comment on the DWAC filing. The call to Patrick Orlando, CEO of DWAC, went to voicemail.

The DWAC, while pushing for an extension of the deadline, also cited ongoing investigations by the Securities and Exchange Commission and the Justice Department into its deal with Trump Media.

“Our failure to obtain any necessary regulatory approvals in connection with the business combination or to resolve certain ongoing investigations within the required time frame may require us to go into liquidation,” the statement said.

Last week, DWAC postponed its earnings report.

DWAC shares were virtually unchanged on Monday but fell sharply from October highs when Trump’s deal was announced.

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