Investors pull almost $140 million from the company planning to merge with Donald Trump's Truth Social
- The deadline for Digital World deal to acquire Donald Trump's Truth Social passed on September 20.
- Investors are walking away from planned commitments of $140 million, SEC filings show.
Investors are walking away from commitments to invest in a company that planned to merge with Donald Trump's Truth Social platform.
"Blank-check" company Digital World Acquisition said in a Securities and Exchange Commission filing on Friday that some backers were pulling a total of $139 million they had planned to put into the deal. Digital World had previously announced funding commitments of $1 billion.
The investors who signed up for the deal about a year ago were able to back out if it was not completed by September 20.
The investors who walked away were not disclosed in the filings, but Reuters reported that Sabby Management, which planned to put in $100 million, is one that had bowed out.
Sources told the news agency that more investors may also withdraw their commitments now that the deadline has passed and were awaiting more favorable terms to be put to them by Digital World.
The company has struggled to close the Truth Social merger and previously blamed the SEC for delaying the deal amid criminal and civil investigations.
The SEC started examining the deal in June over the possibility that Trump Media and Digital World had held discussions before the special purpose acquisition company (Spac) went public last year without informing the watchdog.
As a result, the directors of Digital World received subpoenas in June from a grand jury in the Southern District of New York.
Digital World has faced difficulty in getting sufficient shareholder approval for the merger and could be forced to liquidate and return investors' cash if the deal is not completed. It said earlier this month it had extended the deadline for completion by three months.
Sabby Management and Trump Media and Technology Group did not immediately respond to Insider's request for comment.
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