Trump-linked SPAC stock goes bonkers ahead of midterms
By Paul R. La Monica, CNN Business
Many political experts are predicting big Republican wins in the midterm elections that could give the GOP control of at least one, if not both, chambers of Congress. Investors have taken notice too.
The blank check firm that might merge with former President Donald Trump’s media company has soared in the past week due to expectations that Trump may soon announce a 2024 presidential run.
Digital World Acquisition Corp., a so-called special purpose acquisition company, or SPAC, soared an astonishing 66% on Monday. That’s on top of a 7% gain Friday. Shares dipped slightly in early trading Tuesday, but the stock is still up more than 50% in just the past week and now trades for around $29 a share.
Digital World Acquisition Corp., or DWAC for short, announced plans in October 2021 to acquire Trump Media & Technology Group, owner of the Truth Social app, a right-leaning alternative to Twitter.
Still, the big move in DWAC shares is a bit curious, if for no other reason than the fact that a deal with Trump’s company may not actually happen.
A shareholder vote on the transaction has been delayed several times and was most recently pushed out to November 22. The original vote date was set for September 6.
Still, there’s been a lot of chatter on Twitter and other social media platforms, including the investor-focused StockTwits, about how DWAC shares could get a lift from the rumors that Trump will formally make an announcement about a 2024 presidential run later this month.
The possibility of Republicans winning more seats in the House and Senate also seems to be exciting DWAC investors, many of whom were touting predictions of a “red wave” in their social media posts.
But despite some partisan hopes that a deal will actually occur, the numerous delays and other legal headaches have weighed on DWAC shares. And even with this weeks surge, the stock is still down nearly 50% for the year.
It’s also not certain what will happen to Truth Social now that Elon Musk owns Twitter and has hinted that he might eventually allow Trump back on the platform, reversing a permanent ban of the former president following the deadly riots at the Capitol on January 6, 2021.
Twitter said at the time that Trump was being kicked off the platform due to “the risk of further incitement of violence.”
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
