By Yasin Ebrahim
Investing.com -- Digital World Acquisition said that its sponsor ARC Global Investments would inject about $2.9 million to extend the time needed for the company to complete its business combination with Trump Media and Technology Group if the company fails to win shareholder support for a one-year extension.
Digital World Acquisition Corp (NASDAQ:DWAC) was up more than 3% in afterhours trading.
The news eased investor concerns that the SPAC deal, which is taking Donald Trump's social media company Truth Social public, was at risk of collapse. Reuters reported earlier on Tuesday that Digital World Acquisition failed to win enough shareholder support for a proposal seeking to extend the time needed to complete the deal by one year. Without an extension, the SPAC was set to liquidate on Thursday.
But Digital World Acquisition said late-Tuesday that if the proposal was not approved by the stockholders by Thursday, then ARC Global Investments II, the company's sponsor, intends to contribute an "aggregate amount of $2,875,000 [...] to extend the time to consummate an initial business combination for a three-month period, until December 8, 2022."