Digital World Acquisition Corp., the blank-check firm seeking to merge with former President Donald Trump’s media venture that owns the Truth Social app, has received a delisting notice from the Nasdaq.
In a press release Wednesday, Digital World said it “received an expected letter” from the stock market because hasn’t filed a quarterly report for the period ending on March 31. The letter doesn’t mean the company will be delisted, but its stock could disappear from the Nasdaq exchange if it doesn’t get its act together soon.
“The Nasdaq notification letter has no immediate effect on the listing or trading of the company’s securities on the Nasdaq,” the company said. It has until July 24 to submit a plan to regain compliance of the Nasdaq’s rules.
However, the company said there’s “no assurance” that Nasdaq will accept its plan or that the company “will be able to regain compliance within any extension period granted by Nasdaq.”
Shares of DWAC were flat Thursday.
DWAC announced plans in October 2021 to acquire Trump Media & Technology Group, owner of the Truth Social app, a would-be rival to Twitter. The former president is the chairman and a major shareholder of TMTG. But the deal, between DWAC and TMTG has not come to fruition, as a shareholder vote on the transaction had been delayed several times before it ultimately failed in September 2022.
The controversial merger has also been stalled by legal scrutiny. The Justice Department is investigating the acquisition, in addition to the SEC.
In late June, Digital World disclosed its board members had received subpoenas from a federal grand jury in the Southern District of New York related to due diligence regarding the deal.
Digital World has said the federal probes have blocked the ability to get the deal with TMTG consummated. Despite shareholders’ rejection of the TMTG deal, Digital World said late last year it has been able to buy additional time because its sponsor, ARC Global Investments II, deposited nearly $3 million into the company’s trust account to exercise an option to unilaterally extend the merger agreement.
If that hadn’t happened, the entire deal could have unraveled, forcing Digital World to return the roughly $300 million it has raised. That money is intended to fund the merger with Truth Social owner TMTG. A liquidation would have also threatened the additional $1 billion the Trump media company has raised.