The group of more than three dozen investors who had planned to put $1 billion into the company have begun to waver as bad news keeps piling up around the deal, including a Securities and Exchange Commission investigation, a lawsuit by a scorned business partner against the company taking Trump’s venture public and reports that the Trump social network at the heart of the planned operation is struggling to pay its bills. Already, investors who had promised $138 million in capital have pulled out, with the SEC yet to OK the public offering nearly a year after its announcement.
“This deal has taken more left turns than a doorknob,” said Kristi Marvin, a former investment banker who runs data and research company SPACInsider. “Now, it’s just got so much hair on it.”
Trump Media and Digital World, in the meantime, have been left scrambling. In early September, Digital World faced the threat of liquidation — a wind-down triggered if a SPAC cannot complete a combination within a predetermined period of time, usually one or two years. The companies tried to rally enough shareholders to give them another year to complete the deal, but failed. Digital World’s backers, instead, had to step in with a $2.9 million lifeline that extended the deadline until Dec. 8. They can provide another three months after that, if needed.Trump startup drama may trigger investor exodus – POLITICO