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In July, Digital World reached a settlement with the Securities and Exchange Commission that required it to revise a some regulatory filings and to pay an $US18 million penalty if the merger was completed. Federal prosecutors have charged three men, including a former Digital World director, with taking part in a $US22 million insider-trading scheme.
In the run-up to the regulatory settlement, Digital World ousted its original CEO and main promoter, Patrick Orlando, and revamped its board. Orlando, however, remains a large Digital World shareholder.
Digital World had lobbied hard to get shareholders — most of whom are retail investors — to approve the measure to give the company more time to complete the merger. It hired an advisory firm to encourage 65 per cent of the company’s shareholders to vote for the extension.
The merger still faces hurdles.Credit: Bloomberg
Trump Media also lent support to get out the vote, sending email alerts to Truth Social subscribers urging them to vote for the extension if they were also Digital World shareholders.
“Thank you for all of the outstanding support. Please understand my silence. We remain focused on the task at hand and are watching every word we say,” Eric Swider, Digital World’s CEO, said on Truth Social shortly after the result of the vote on an extension was announced.
The merger still faces hurdles.
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In early August, Trump Media recommitted itself to completing the deal only after it received new terms that would strengthen Trump’s control over the merged company. The revised agreement with Trump Media anticipates the merger closing by the end of December. Trump’s company also can terminate the agreement before then if Digital World cannot meet an October 9 deadline for submitting amended regulatory filings.
If the deal is completed, Trump will be the newly merged company’s largest shareholder.
Shares of Digital World jumped after the company announced the result of the vote. With a market valuation of well over $US600 million, post-merger Trump Media would be one of Trump’s most valuable holdings.
This article originally appeared in The New York Times.
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