(Reuters) – Some investors are backing away from Digital World Acquisition Corp’s plan to acquire former US President Donald Trump’s Truth Social, the company said on Friday.
Digital World said it has received termination notices from PIPE investors to terminate approximately $139 million of investments out of a previously announced $1 billion commitment.
Investors, who signed the PIPE commitment about a year ago, are free to move their funds past the September 20, 2022 deadline if the deal is not completed.
Digital World did not disclose which investors have withdrawn. Sources told Reuters that Sabi Management, which has committed $100 million to Pipe, is one of the investors who have terminated their services.
Sabi Management declined to comment.
Sources said more investors may pull out in the next few weeks, as they can wind down at any time after the deadline. The sources added that many are waiting for the DWAC to propose more favorable terms for PIPE investors. The deal between Special Purpose Acquisition Corporation (SPAC) and Trump Media and Technology Group (TMTG), which owns Truth Social, has been frozen due to civil and criminal investigations into the circumstances surrounding the agreement.
TMTG did not immediately respond to a request for comment.
SPAC had hoped the US Securities and Exchange Commission, which is reviewing Digital World’s disclosures about the deal, would now give its blessing. Digital World said this month it would extend the life of the deal by three months after its offer from its shareholders for a 12-month extension failed.
(Reporting by Akash Sriram and Nivedita Balu in Bengaluru, Svi Herbst Bayliss and Crystal Ho in New York; Editing by Maju Samuel and Josie Kao)
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