- The deadline for Digital World’s deal to buy Donald Trump’s Truth Social expired on September 20.
- Investors are moving away from planned commitments $140 million, SEC filings show.
- Reuters reported that Sabby Management investors bowed out and took away $100 million.
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 withdrew 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 subscribed to the deal about a year ago could withdraw 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 several investors may also withdraw their commitments now that the deadline has passed and were waiting for more favorable terms for them from Digital World.
The company has been fighting to close the Truth Social merger and has previously accused the SEC of delaying the deal amid criminal and civil investigations.
The SEC began investigating the deal in June over the possibility that Trump Media and Digital World had held discussions before the special purpose vehicle (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 had trouble getting sufficient shareholder approval for the merger and may be forced to liquidate and return investors’ cash if the deal is not completed. It said earlier this month that it had extended the deadline for completion by three months.
Sabby Management and the Trump Media and Technology Group did not immediately respond to Insider’s request for comment.