Digital World Acquisition Corp. – the special acquisition company (SPAC) to make Truth Social public – unveiled in a Filing with the Securities and Exchange Commission On Friday, investors withdrew from $139 million in pledges from the $1 billion previously announced by the company.
There’s probably more to come. Investors, who agreed to withdraw the money nearly a year ago, can now drop their pledges because Digital World missed the original September 20 deadline to merge with Truth Social.
DWAC is extension of the deal deadline by three months after shareholders declined to approve its offer for a 12-month extension. But investors can still pull out.
It’s just the latest problem for Digital World and Truth Social.
A major supplier complained last month that: Truth Social Bills Were Unpaid. A major web hosting operator said: Truth Social was owed approximately $1.6 million in contractually obligated payments, a claim that suggests the operation’s finances in “significant disorder” Fox Business News reported.
In another setback, Social’s Truth trademark application rejected last month because the name was too similar to other operations.
Truth Social is not the juggernaut some investors had hoped for. The social media platform is largely a forum for Trump, who repeatedly posts praising himself and reposts articles from right-wing media praising him every day.
Reacting comments mostly relate to QAnon conspiracies, overly pro-Trump and anti-Joe Biden memes and silly comments like, “Ode to the greatest president ever.”
Comments lack the back and forth from social media platforms like Twitter, making them more of a dialogue. Most of the negative comments about Truth Social will be buried or disappear from the site, which the organizers promised would be censorship free.
Trump launched Truth Social after booting off Twitter in the wake of the January 6, 2021 US Capitol riots. Trump has used the platform much as he did with Twitter — to rail against enemies, complain that he is being victimized and falsely claim he won the 2020 presidential election.
Last month, Digital World warned in a SEC filing that a dip in Trump’s popularity could hurt the company. The filing noted that Truth Social’s success hinges on the “reputation and popularity” of investigation-ridden Trump, who is chairman of the Trump Media and Technology Group, which owns and operates the social media platform.
“To be successful, TMTG will need millions of those people to register and use the TMTG platform regularly,” the filing warned. “As President Trump becomes less popular or there are further controversies that damage his credibility or people’s desire to use a platform associated with him,” the planned merger with Digital World warned.