Digital World (NASDAQ:DWAC) shareholders voted Friday in favor of merging with the Trump Media & Technology Group (TMTG), the parent company of Truth Social. This approval comes more than two years after the deal was first announced.

Since October 2021, Digital World has faced an uphill battle as multiple regulatory agencies have investigated it and the deal has faced delays. As a result, the blank-check firm ultimately sought an extension for the merger deadline. But today, at long last, shareholders cast their votes to merge both companies and create a new stock.

Despite this update, DWAC stock closed down 13.7% on Friday.

DWAC Stock Falls Despite Merger Approval

It is impossible to pinpoint exactly what is pushing DWAC stock down today following the shareholder vote. But the most likely explanation is that the market is worried about a company with such close ties to Donald Trump.

The former U.S. president is currently facing a bond of $454 million which he has yet to pay. On top of that, the list of 91 felony counts he faces should worry investors.

As part of the TMTG SPAC merger, Trump could see proceeds of more than $3 billion. However, the company has a lockup period, which will block him and other insiders from offloading shares for six months.

And DWAC stock has problems of its own. University of Florida finance professor Jay Ritter has described shares as “grossly overvalued.”

“It qualifies as a meme stock for which the price is divorced from fundamental value. … Meme stock investors are usually buying on the basis of the greater fool theory of investing: It is overvalued today, but I hope to make money selling it to an even greater fool tomorrow at an even higher price.”

Other experts recently expressed similar takes, citing DWAC’s meme stock potential and valuation as cause for concern.

It remains to be seen how DWAC shares will trade in the final days before TMTG debuts independently. Investors should brace for volatility.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.