• by Karlene Lukovitz  @KLmarketdaily, October 13, 2023

Digital World Acquisition Corp. (DWAC), a special purpose acquisition company (SPAC) that has been raising funds for the Trump Media & Technology Group (TMTG), is returning a remaining $533 million of $1 billion raised to finance the venture. Investors had already withdrawn $467 million in commitments.

TMTG operates Donald Trump’s social platform, Truth Social.

The development ends a private investment in public equity (PIPE) transaction that would have delivered $1 billion in funds from institutional investors for TMTG as part of a merger of DWAC and TMTG that was proposed back in 2021.

Failure to complete the merger within a specified timeframe left investors free to pull out, and triggered the return of the remaining funds to investors.

DWAC declared its intention to "unwind" the remaining financing in a filing with the Securities and Exchange Commission this week.

It is unclear whether the venture will try to raise new funds, or how TMTG would finance its operations assuming that a merger still goes through.

The merger has encountered multiple obstacles, including scrutiny by the SEC.

However, in a press release, DWAC CEO Eric Swider characterized the decision as a "positive development."

“Despite how others may seek to characterized the PIPE commitment cancellations, we want our shareholders to understand that these are a positive development in our ability to consummate the [merger] and we ask for the support of the remaining PIPE investors in agreeing to terminate [their] investments,” he stated. “Upon completion of our merger, the reduced need for capital by TMTG, reflects their commitment to growing a sustainable business model.”

The stock's price hit more than $100 at one point in 2022, but was at $15.40 ahead of the market opening on Friday.