Digital World said it received termination notices from private investors in a Private Investment in Public Equity (PIPE) terminating nearly $139 million in investments of the $1 billion commitment. of dollars that it had previously announced.
Investors, who signed the PIPE pledge about a year ago, are free to move their money past the September 20, 2022 deadline if the deal is not completed.
Digital World did not disclose which investors pulled out. Sources told Reuters that Sabby Management, which had committed $100 million to the PIPE, was among the investors who pulled out.
Sabby Management declined to comment.
Other investors could exit in the coming weeks, the sources say, as they can exit any time after the deadline. Many expect DWAC to offer more favorable terms to PIPE investors, the sources added. The deal between the Special Purpose Acquisition Company (SPAC) and Trump Media and Technology Group (TMTG), owner of Truth Social, has been frozen due to civil and criminal investigations into the circumstances surrounding the deal.
TMTG did not immediately respond to a request for comment.
SPAC hoped the US Securities and Exchange Commission, which reviews Digital World’s disclosures about the deal, would have already given its blessing. Digital World said this month it would extend the deal’s term by three months after its request for a 12-month extension from its shareholders failed.