After skyrocketing over 1100% during the last week in a trading frenzy, shares of Digital World Acquisition Corp (DWAC) have lost some steam, falling by 11% to $83.86 per share.
When the stock started trading on the Nasdaq on October 19, its price went from a mere $9.95 a share to $94.95 a share three days later. It was supported by news that former American President Donald Trump is about to launch TRUTH Social, his own social media platform, through a SPAC merger with the Nasdaq-traded Digital World Acquisition Corp (DWAC).
The GameStop-style frenzy was such that it resulted in 12 trading halts on Friday, but it is now showing the first signs of slowing down. Could the Trump-fuelled craze be dying down? We are not in a hurry to make predictions just yet.
Launching TRUTH Social will allow Donald Trump to step back into the public sphere after he was banned from Facebook and Twitter following the US Capitol riots last January. Like GameStop and AMC, DWAC is supported by amateur Reddit traders and it has strong meme stock potential.
Hate him or love him, Donald Trump knows how to stir things up. His new company Trump Media and Technology Group (TMTG) would gain access to more than $200m in capital to help launch TRUTH Social. Its main objective will include “No Political Discrimination, Canceling Cancel Culture, Standing Up to Big Tech.”
In the press release Donald Trump said: “ 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.”