Trump Social Media Stock $DWAC SOARS, Up Over 190% Trading Halted Multiple Times This Morning
Traders temporarily paused trading in the stock of SPAC business Digital World Acquisition Corp. on Thursday after its price surged on abnormally large trading volume following reports of a merger that would establish former President Donald Trump’s proposed social media platform.
Digital World Acquisition was the most actively traded stock on the Fidelity platform on Thursday, and it was also the most actively traded stock on the consolidated tape of New York Stock Exchange and Nasdaq listings, according to the Fidelity platform.
On Fidelity’s platform, buy orders for $DWAC — a so-called special purpose acquisition company that was formed to generate cash in the public markets in order to acquire private companies — exceeded sell orders by a factor of nearly three to one.
According to FactSet, more than 210 million shares of $DWAC had already changed hands by the time the trading day began just two hours earlier.
Compared to this, SPY, the exchange-traded fund that tracks the S&P 500, had only transacted approximately 12 million shares around the same time period.
At its session high, the company’s stock price had risen over 190% percent to over $29 per share.
>>WILL YOU JOIN TRUMP’S SOCIAL MEDIA? TAKE THE OFFICIAL SURVEY FROM THE REPUBLICAN PARTY
In a press release Wednesday night, Trump’s new company Trump Media & Technology Group said it and DWAC “have entered into a definitive merger agreement, providing for a business combination that will result in Trump Media & Technology Group becoming a publicly listed company, subject to regulatory and stockholder approval.”
The president also announced the launch of the “TRUTH Social” network, which he claims would “stand up to the tyranny of Big Tech.”
Since early this year, Trump has been barred from using the social media platforms Twitter and Facebook.
Donald Trump had been a compulsive Twitter user before the ban, sending out many tweets each day during his administration, and had been barred from doing so. The restriction has made it difficult for President Donald Trump.
The president’s company stated in a press statement issued Wednesday night that its “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.”
President Donald Trump’s re-election effort against Vice President Joe Biden ended in defeat in late 2020, prompting the formation of Digital World Acquisition.
Following the close of trading Thursday, the ticker DWAC was among the top 10 most mentioned stocks on Reddit’s WallStreetBets chatroom, surpassing even the mentions of the meme stock GameStop, according to alternative research source Quiver Quantitative.
That could be a clue that individual investors who were engaged on social media platforms were a driving force behind the surge in the SPAC stock price.
A press release issued Wednesday stated that the proposed merger values Trump Media & Technology Group “at an initial enterprise value of $875 million, with a potential additional earnout of $825 million in additional shares (at the valuation they are granted), for a cumulative valuation of up to $1.7 billion, depending on how the stock price performs after the business combination.”
“Trump Media & Technology Group’s growth plans initially will be funded by DWAC’s cash in trust of $293 Million (assuming no redemptions),” according to the release.
Trump’s new firm does not have any officials, employees, or operations, according to a corporate summary published by Trump.
As a substitute, the 22-page slide show has various visuals demonstrating how many followers Trump had on Twitter before he was suspended, as well as claims that the new company will compete with both Disney+ and Netflix, among others.
According to the news release, Patrick Orlando, CEO of DWAC, stated, “Digital World was formed to create public shareholder value and we believe that TMTG is one of the most promising business combination partners to fulfill that purpose.”
“Given the total addressable market and President Trump’s large following, we believe the TMTG opportunity has the potential to create significant shareholder value,” Orlando said.
According to the press release, “TMTG intends to launch a subscription video on demand service” called TMTG+.
“TMTG+ will feature ‘non-woke’ entertainment programming, news, podcasts, and more,” the release said.
