Trump SPACDWAC prices fall after social media news rises sharply

The social media app is developed by the Trump Media and Technology Group (TMTG).

Rafael Enrique | LightRocket | Getty Images

SPAC shares linked to Donald Trump’s planned social media platform fell sharply on Monday afternoon after booking a significant rise last week. Following the news that it will merge with a social media company planned by the former president.

Digital World Acquisition Corporation. Shortly after the 2:00 pm ET, shares fell 10% and traded at less than $ 83 per share.

Earlier that day, DWAC was trading about $ 94 per share, about 4% higher before hovering back and forth on both sides of the “unchanged” level.

That pace was a big change from last week, soaring from $ 9.96 per share on Wednesday to nearly $ 94.20 per share on Friday. This is a whopping 845% increase in two days.

So-called special-purpose companies also saw significantly lower trading volumes on Monday.

As of the afternoon, more than 55 million shares of DWAC were replaced, according to FactSet.

Last thursday at that price In one session, it surged more than 350%, trading nearly 500 million shares of DWAC. DWAC that day was the most traded name on the integrated tape listed on the New York Stock Exchange and Nasdaq.

Another sign that the Trump-fueled pandemic has subsided, or at least eased a bit, is the stock price of advertising software startups. Phunware It fell 20% on Monday.

Phunware, which was involved in Trump’s 2020 reelection campaign, soared 470% on Friday.

There is no indication that DWAC and Phunware have a business relationship. However, last week’s rise in Phunware coincided with a surge in SPAC inventories.

Short-selling Iceberg Research revealed a bearish position at DWAC on Monday, saying investors are facing uncertainty in the blank-check deal as Trump could become the dominant shareholder after the merger. rice field.

Iceberg Research tweeted, “Now that the initial excitement has passed, we will only see risks for investors in the near future. Based on Trump’s performance, at current prices, the post-merger company will be renegotiated. Many of them are likely to be maintained. “

“SPAC holders do not yet own part of this project. Trump has leverage, not them.”

DWAC continued to be a popular chat room topic among retailers who allegedly turned SPACs into the latest hot “meme” stocks in 2021 last week.

According to alternative data provider Quiver Quantitative, DWAC ticker is the second most popular name in Reddit’s WallStreetBets chat room on Monday, after Tesla, an electric car giant that achieved a market capitalization of $ 1 trillion on the same day. It was a thing.

One of WallStreetBets’ trend posts on Monday said “DWAC-ALL IN” and received over 500 comments.

SPAC, also known as a blank check company, was founded to raise capital on the public stock market with the purpose of using cash to buy or merge private companies.

Trump’s new social media company, Trump Media & Technology Group, announced it on Wednesday, and DWAC agreed to merge the former president’s company to become a publicly traded company.

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Trump SPACDWAC prices fall after social media news rises sharply

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