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Update: Adds voting results, stock move.
Shares of Digital World Acquisition Corp (NASDAQ:DWAC) slid 8.6% on Friday in volatile trade after its shareholders voted to approve the SPAC's deal to take Trump Media & Technology public. The stock had spiked as much as 12.1% ahead of the shareholder meeting.
Donald Trump will own a major stake in the combined company. The stake could be valued at around $3B based on DWAC's stock price, which has more than doubled in value this year. However, Trump can't sell his shares easily for six months due to the deal's lock-up period.
The shareholder vote comes amid multiple legal issues. DWAC (DWAC) filed a lawsuit against its biggest investor, ARC Global, to force it to vote in favor of the merger.
Trump Media was also sued by United Atlantic Ventures co-founders, who alleged that it tried to dilute the stake of its founding partners.
Friday's vote is also important in light of Trump seeking to put a $454M civil fraud penalty on hold while he appeals. "If I sold assets, and then won the appeal, the assets would be forever gone," Trump said on Truth Social. "Also, putting up money before an appeal is VERY EXPENSIVE."
SA analyst Giesbers Investment Strategy believes traders could make money from DWAC in the short term, but warns of volatility ahead.