Trump Media’s funding partner says it’s returning $1 billion to investors, and many are demanding the money back

The financing partner of Trump Media & Technology Group said it will return the remaining $533 million of the $1 billion raised to finance the project after investors canceled $467 million in commitments.

Digital World Acquisition Company (DOAC), so-called Special Purpose Acquisition CompanyIt said in a regulatory filing that it had received termination notices from investors for $467 million in financing. The remaining $533 million will be returned to investors, with DWAC CEO Eric Swider saying in a press release that the decision is a “positive development” as Trump’s media group focuses on developing a “sustainable business model.”

Losing DWAC’s funding appears to be a step backwards for a potential merger between the company and Trump’s media organization, which runs Truth Social, a social media service with a conservative flavor. When the merger was first announced in 2021, it sparked an 800% turnout. DWAC shares riseleading to comparisons with stock memes.

The stock, which topped $100 in 2022, was at $15.40 before trading began on Friday.

But since then, the merger has faced several hurdles, including regulatory scrutiny.

“[D]Despite how others may seek to describe [private investment in public equity, or PIPE] “Canceling the commitments, we want our shareholders to understand that these cancellations represent a positive development in our ability to complete the business combination,” Swider said in the statement.

Plans to complete the merger

DWAC had securities purchase agreements worth approximately $1 billion with certain institutional investors, with the company noting in a regulatory filing that those investors sent it termination notices worth approximately $467 million. It said it would “dismantle the remaining balance” of the investment.

With the loss of funding, it is not clear how Trump’s media group, called Trump Media & Technology Group, will finance its operations after the merger. The plan was for DWAC to provide TMTG with a large pool of funds after the merger was completed.

But this merger has been postponed several times, most recently with DWAC shareholders in September Approval of a one-year extension Regarding the deadline for the merger between the two companies. Without this extension, DWAC would have faced liquidation last month.

“Today’s announcement is an important step toward eliminating the PIPE — which TMTG believes will be in the best interests of TMTG stockholders — and completing our merger with DWAC as soon as possible,” TMTG CEO Devin Nunes said in a statement Thursday. He did not provide details on why canceling the financing would be beneficial to his company’s shareholders.

However, Swider noted in the statement that Trump Media Group has a “lower need for capital” and a “commitment to developing a sustainable business model.”