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Digital World Acquisition (NASDAQ:DWAC) stock is sliding on Friday as the company waits for a vote from shareholders to extend its merger window with Truth Social.
Truth Social is the social media company created by former President Donald Trump. A merger with Digital World Acquisition would take the company public. However, the window for that merger is closing.
Digital World Acquisition is asking shareholders to vote in favor of extending that window to Sept. 8, 2023. All of this comes as legal trouble continues to surround the special purpose acquisition company (SPAC) merger between DWAC and Truth Social.
The latest problem comes from the FBI raid of Trump's Mar-a-Lago mansion. There's also an investigation into if a merger agreement was made before Digital World Acquisition went public. If so, that violates regulations.
It's also worth mentioning that Truth Social is still a fairly new social media platform. It officially launched in May and was created after Trump was banned from Twitter (NYSE:TWTR). Truth Social has about 2 million monthly active users, as compared to Twitter's 300 million.
Investors will want to be careful about taking any stakes in DWAC stock right now. The current legal trouble surrounding the company makes it a risky investment ahead of its potential Truth Social merger.
DWAC stock is down 1% as of Friday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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