- DWAC stock surges 8% on Thursday to close at $48.06.
- Digital World Acquisition stock ignites as President Trump returns to Truth Social.
- DWAC shares gained 13% in the after-hours market on Thursday.
Guess who's back-back tell a friend, Shady's back-back! Well, not quite, but he who must-not-be-named for Democrats is back online. Ok, that's enough vague and obscure song and movie references which probably are way too old for most of you anyway.
Twitter (TWTR) and Tesla (TSLA) have been stealing all the social media limelight these past few weeks but as promised President Trump has returned to Truth Social and sent its proposed SPAC partner DWAC stock soaring. Truth Social was launched by Trump Media and Technology Group (TMTG) and DWAC is the SPAC vehicle that is proposing to take TMTG public.
The Donald's return to social media is the perfect antidote to DWAC stock struggles and a knock to Twitter and Elon Musk. While nothing had ever been confirmed it was assumed that Elon Musk's advocacy for free speech would see Donald Trump's Twitter account restored. Elon Musk had after all said he favors suspension rather than outright bans from Twitter, but last week former US President Trump said he would not be returning to Twitter and instead promised to return to Truth Social. So promise kept as he posted on Thursday evening: "I'm Back! COVFEFE".
Ok, let's dig this one up again because there might be some of you who have no idea what COVFEFE means. The origin apparently dates back to a tweet President Trump sent in May 2017, "Despite the constant negative press covfefe". It was widely assumed to be a misspelling for coverage but quickly went viral. President Trump though did not admit it was a misspelling and instead posted later "Who can figure out the true meaning of 'covfefe' ??? Enjoy!"
According to Wikipedia "U.S. Representative Mike Quigley (D-IL 5) introduced H.R.2884, "The Communications Over Various Feeds Electronically for Engagement Act (COVFEFE Act)" on June 12, 2017. It would require the National Archives to preserve and store social media posts by the President of the United States. The bill was referred to the House Committee on Oversight and Government Reform on the same day but saw no further congressional action."
Excellent I'm glad we cleared that up and we are all up to speed on what COVFEFE means then! So, one tweet (oops see what I did there), sorry one truth, has generated a significant market cap gain of about $200 million for DWAC stock. Now imagine if President Trump tweeted (oops), truthed all the time. Truthed, is that even a verb? Maybe it will catch on, after all how weird did tweet first sound.
However, before getting too excited please be aware that DWAC has been struggling to get the SPAC deal with Truth Social over the finish line. The deal has been beset with delays and executive resignations which raises some concerns. Indeed Kerrisdale Capital recently opined that “with each passing day, the truth becomes harder to deny; a merger between two sketchy companies that is already taking too long is likely headed for collapse. We value DWAC at the cash held in trust: $10 (-80%).”
Kerrisdale did say they are short DWAC. We have no visibility on Kerrisdale and are merely reporting the story, we do not vouch for its accuracy or otherwise.
DWAC stock is still in a clear and long-term downtrend. It is much too speculative at these levels for us, but if you do want to play it it does exhibit huge volatility and momentum. None better than former President Trump to stir up momentum in something, but please use careful risk management, we think this is way too high for the medium-to-long term.
DWAC stock chart, daily