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Shares of Truth Social merger partner fall after Trump’s candidates underwhelm in midterm elections

This photo illustration shows an image of former President Donald Trump next to a phone screen that is displaying the Truth Social app, in Washington, DC, on February 21, 2022.
Stefani Reynolds | AFP | Getty Images

Shares of the blank check company set to take Trump Media and its Truth Social platform public fell sharply Wednesday after candidates endorsed by the former president disappointed in high-profile midterm election races.

Digital World Acquisition Corp.‘s shares fell more than 20% Wednesday morning.

In Pennsylvania, Trump-endorsed Senate candidate Dr. Mehmet Oz lost to Democratic Lt. Gov. John Fetterman, NBC News reported, costing the Republican party a Senate seat. In Michigan, Tudor Dixon lost a gubernatorial race and Kristina Karamo lost her bid to be secretary of state. Both were supported by Trump.

The weekend leading into the election, Trump held huge rallies where he read off a list of Republican candidates. He also helped to raise hundreds of millions of dollars for Republican candidates in high-profile Senate campaign.

The rallies also served as a platform for Trump to seemingly hone a speech that sounded like his own bid for the 2024 presidential campaign. On Monday, shares of DWAC soared at Trump’s hinting of another presidential run.

Another presidential run could drive traffic to Trump’s Truth Social platform, as the ex-president has agreed to post exclusively on the social media platform for eight hours before posting it anywhere else.

Still, DWAC’s shares are trading sharply down so far this year as the special purpose acquisition company faces financial and legal challenges as it seeks to merge with Trump Media and and Technology Group, the parent company of Truth Social.

DWAC has been working to secure enough shareholder support to extend the deadline for the merger with Trump Media until Sept. 2023, with the vote being pushed back multiple times. It will take place again on Nov. 22.

The merger also faces a criminal probe into possible securities violations over discussions that took place between DWAC and Trump Media prior to the deal announcement.

The delays have prompted at least $138 million of $1 billion in investments to be pulled from DWAC. The ex-president himself has also suggested the SPAC merger might not go through. At an October rally in Michigan, Trump told supporters if the financing didn’t come through he would take it private.

–CNBC’s Jack Stebbins contributed to this article.

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