Digital World Acquisition Corp. (DWAC) SPAC stock jumped 400% on news of Trump social media platform
In case you thought meme stocks were dumb, here comes DWAC to make your brain hurt even more.
Last night, former President Donald Trump announced a new social media platform business called Trump Media & Technology Group. The company made some news in the stock market today as they announced a merger with Digital World Acquisition Corp. Shares of the previously minuscule special-purpose acquisition company (SPAC) soared over 400% today on the news.
Today's merger values Trump Media & Technology Group at $875 million with a chance at an additional $825 million earnout valuing the combined entity at $1.7 billion. The company plans to operate using funding provided by DWAC's existing $293 million in cash holdings. The company announced a new app called TRUTH Social that will be launching next month, and has plans for a subscription video on demand platform named TMTG+. "TMTG+ will feature 'non-woke' entertainment programming, news, podcasts, and more," according to today's announcement. In the press release announcing the merger, the company stated that "Trump Media & Technology Group's mission is to create a rival to the liberal media consortium and fight back against the 'Big Tech' companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America."
Former President Trump, who actually lost to Joe Biden last year in the most recent presidential election, had this to say:
“I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech. We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable. I am excited to send out my first TRUTH on TRUTH Social very soon. TMTG was founded with a mission to give a voice to all. I'm excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech. Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!”
There certainly is a lot to unpack here, but the focus of today's news is to point out the insane jump in share price of this newly-formed social media company. Nearly half a billion shares of DWAC have traded today. The stock closed yesterday at $9.96/share and is now trading over $56.93/share in afterhours trading. In a stock market that recently valued Facebook at over $1 trillion, I guess $1.7 billion makes sense? There are probably a lot of supporters of the former president and his new platform out there to keep shares running, but it is very hard to judge the current valuation with no real idea about the company's future profits or revenues.
It certainly appears that a new meme stock has risen and drawn the attention and ire of traders on Wall Street today. Readers can sign up for the TRUTH Social invite list, if they are so inclined, at the app's official website. Some folks may remember that the impeached former president has been banned from Twitter and Facebook following his role in inciting the failed January 6, 2021 coup at Capitol Hill.
Not sure what else to say about this one, folks. Are you buying shares of DWAC on this news? Do you think this is a bad idea and the company's management should feel bad? Do you think SPACs are dumb? Let us know in the Shacknews Chatty comments thread below. We really want to hear your opinion.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
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