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Digital World said it had received termination notices from
private investment in public equity (PIPE) investors ending
nearly $139 million in investments out of the $1 billion
commitment it had previously announced.
Investors, who signed the PIPE commitment about one year ago,
are free to move their money after the Sept. 20, 2022 deadline
if the deal has not completed.
Digital World did not disclose the investors that pulled out.
Sources told Reuters Sabby Management, which had committed $100
million to the PIPE, is one of the investors who have
terminated.
Sabby Management declined to comment.
More investors could pull out in the next few weeks, sources
said, as they can terminate anytime after the deadline. Many are
waiting for DWAC to propose more preferred terms to PIPE
investors, sources added. The deal between the special purpose
acquisition company (SPAC) and Trump Media and Technology Group
(TMTG), which owns Truth Social, has been on ice due to civil
and criminal probes into the circumstances around the agreement.
TMTG did not immediately respond to a request for comment.
The SPAC had been hoping the U.S. Securities and Exchange
Commission, which is reviewing Digital World's disclosures on
the deal, would have given its blessing by now. Digital World
said this month it would extend the deal's life by three months
after its bid for a 12-month extension from its shareholders
fell short.
(Reporting by Akash Sriram and Nivedita Balu in Bengaluru, Svea
Herbst-Bayliss and Krystal Hu in New York; Editing by Maju
Samuel and Josie Kao)
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