Digital World Acquisition Corp (DWAC stock) crashes after Trump candidates lose midterms
- DWAC shares collapse 17% after Republican candidates lose US Senate.
- Digital World Acquisition Corp's merger with Truth Social relies on Trump popularity.
- Trump-aligned candidates lost races across the country on Tuesday night.
Digital World Acquisition Corp (DWAC) stock has lost 17% in Wednesday's premarket after former president Donald Trump's chosen squad of candidates lost up and down the ballot during Tuesday's midterms. This fact makes it less likely that Trump will run in 2024 for a second White House bid. Trump running for another presidential term in office is precisely the reason why DWAC stock shot up 66.5% on Monday.
Donald Trump midterm election news
As the special purpose acquisition corporation (SPAC) trying to merge with Trump Media & Technology Group, which owns the TRUTH Social app, DWAC has always traded up and down depending on the current popularity or shenanigans of the ex-president. Over the weekend, 76-year-old Trump had signaled twice during political rallies that he would likely run again in the 2024 election. When asked by reporters when he would formally announce, however, he said it would somewhat depend on how his slate of Republican candidates performed during Tuesday's midterms.
They did not perform well.
Though prognosticators and political insiders alike expected a major Republican wave election due to inflation under President Joe Biden's watch, the Republican party seems to have failed to pick up the majority of senate seats. Though ballots are still being counted, Republicans' chances of taking over the House are now in question, whereas Tuesday they looked like a foregone conclusion.
Trump's high-profile chosen candidates – be it Herschel Walker in Georgia, Mehmet Oz in Pennsylvania, or Kari Lake in Arizona – all came in behind their opponents. Additionally, Trump's would-be main opponent in the Republican primary, Florida Governor Ron DeSantis, won his election by nearly a 20-point margin. Not only that, but his state far outdid the rest of the country in terms of Republican success. Two congressional House districts were picked up by the Republicans in Florida, replacing Democratic Party incumbents. Already on Wednesday, prediction betting markets have moved DeSantis ahead of Trump as the likelier Republican candidate for president in 2024.
DWAC stock forecast
Sorry, guys. This one looks like it is headed back toward $16 again. That is the level that has seemed to hold up during the SPAC's trials and tribulations over the past two months as it deals with ongoing investigations from the Securities & Exchange Commission while still trying to secure enough shareholder votes to extend the time available to complete the merger. Where DWAC is currently trading in the $23 area, one support level from September at $21.88 looms nearby.
Trump will need to still announce his run to energize DWAC bulls, however. With that becoming less likely now though, the move back to $16 over the coming weeks seems a better bet. The largescale sell-off now seems obvious, seeing as how the Relative Strength Index (RSI) reached oversold territory immediately on Monday. In the nearer term, expect DWAC to glide back to the 9-day moving average, which currently sits at $19.34.
DWAC 1-day stock chart
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
