It was largely priced in. Even so, Trump’s formal announcement of candidacy for the 2024 US Presidential elections is creating a favorable tailwind for the shares of Digital World Acquisition Corp. (NASDAQ:DWAC), a SPAC that is slated to take the Trump Media and Technology Group (TMTG) public via a reverse merger.
We reported on the 07th of November that Trump was expected to formally enter the 2024 Presidential race on the 14th of November. That announcement, however, came one day later – on the 15th of November.
Bear in mind that TMTG intends to use the funds acquired through a public flotation of its shares to build a conservative-oriented media machine, which includes plans to bolster Trump’s newly-launched social media platform, dubbed Truth Social, as well as launch a subscription-based, video-on-demand service and initiate cloud-based offerings under the “tech stack” suite of products.
So, what does Trump’s candidacy mean for Digital World’s prospects? Well, a formal Presidential bid means that more users will flock to the Truth Social platform to hear Trump’s thoughts on various subjects, boosting the platform’s engagement metrics in the process. This is doubly important as Trump has so far not given any indication of coming back to Twitter despite indications that Elon Musk is about to remove the blanket ban on the former US President.
Trump’s Truth Social has a similar design interface to that of Twitter. However, the platform has just around 2 million daily active users. For comparison, over 200 million people use Twitter daily.
While Digital World shares are currently benefitting from externalities, the SPAC continues to flounder when it comes to its intrinsic factors. For instance, the merger between Digital World and TMTG has been complicated by a flood of federal investigations, including an ongoing investigation by the SEC and FINRA on allegations that the SPAC’s management violated securities law by holding private discussions about a merger with TMTG as early as May 2021 but failing to disclose this pertinent information in its public filings. The SEC is also looking into reports that Rocket One Capital might have been privy to the impending merger between TMTG and DWAC before the public announcement. These developments have forced DWAC and TMTG to try to secure an extension – via shareholder approval – to the contractually mandated timeframe by which this deal has to be consummated. The next iteration of a special meeting of the SPAC’s shareholders is now scheduled to take place on the 22nd of November, where DWAC and TMTG will again try to extend the merger consummation deadline by 1 year.
Source: https://www.nasdaq.com/market-activity/stocks/dwac
None of these developments seem to matter to Digital World shareholders at the moment. Consider the fact that the SPAC’s shares are currently up over 4 percent in early pre-market trading. With the stock inextricably tied to Trump’s political fortunes now, expect wild gyrations as Trump moves up or down in polls.
The post MAGA Stock: The Shares of Trump-linked Digital World (DWAC) Jump as the Former US President Announces 2024 Candidacy by Rohail Saleem appeared first on Wccftech.
