UPDATE: This is not fake news. Digital World Acquisition Corp. (DWAC) surged 246% to $175 at 10 a.m. in New York. The SPAC, which is merging with former President Donald Trump's Trump Media & Technology Group in order to take the latter's as of now non-existent social media platform Truth Social public, appeared to be frozen in early trading when it opened up 190% at 9:30 a.m.
- DWAC surges to over $70 in Friday premarket.
- Digital World Acquisitions Corp. plans to take Trump's Truth Social platform public.
- The SPAC soared 357% on Thursday.
...And he’s back! After getting banished from both Twitter (TWTR) and Facebook (FB) in the deluge that followed the failed coup attempt on the US Capitol by his supporters on January 6, Donald Trump is once again remaking his business persona, this time as the principal figure behind a new social media company that is yet to be launched but already has a billion-dollar blank check company lined up to take it public.
Digital World Acquisition Corp. (DWAC), a Special Purpose Acquisition Company or SPAC, announced its agreement on Thursday to take Trump Media & Technology Group public. Shares of the SPAC rose 357% on the news as retail traders piled in, causing DWAC’s market capitalization to reach $1.5 billion. At the time of writing, DWAC is up another 65% in Friday’s premarket.
DWAC News: The case for a conservative social media giant
The real estate scion, turned casino empresario, turned public company CEO, cum reality television star and controversial one-term US President is now aiming his sights on Silicon Valley.
Trump Media & Technology Group (TMTG) thus far only has a pitch deck for Truth Social – his attempt to upend the power of the two aforementioned social media behemoths. Interestingly, Alphabet’s (GOOGL) YouTube does not receive the same vehemence in the pitch deck (I wonder why?) Truth Social’s raison d'être is surely Trump’s lifelong passion for striking back against his detractors, but the business model offers a reasonable proposal.
The elevator pitch is that the social media business is “ripe for further segmentation.” This is another way of saying that Trump voters and American conservatives at large would desire a social media channel outside of the mainstream where they could have a safe space from censorship, a la Fox News.
“TMTG aspires to create a media powerhouse to rival the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America,” screams the pitch deck.
Truth Social would harness Trump’s heavy following – 146.5 million followers between Twitter, Facebook and Instagram before his ex-communication – to steal eye balls away from entrenched social media platforms. The company points to a survey showing that 30% of those surveyed by the Hill newspaper back in March would join a Trump-back social media platform. Another 16% answered “maybe”.
DWAC Technical Analysis: Only the retail trade will tell
After closing at $9.96 on Wednesday as one of many unknown SPACs, DWAC opened Thursday on the news at $12.73 before veering up to a high of $52, just above the 261.8% Fibonacci level at $51.78. The $50 level appears to have acted as resistance on Thursday, but as the Friday premarket has traded DWAC up to $76.30, it would be expected that $50 would now act as support. The 161.8% Fibonacci at $35.76 is the only other support level in the region.
At the premarket DWAC price of over $70, it is all atmosphere at this altitude. This means Fibonacci extension levels are the only game in town. The premarket price has been hovering around the 361.8% Fibo at $67.80, meaning at least some big-timers are already taking profits. If DWAC price conquers this level, the next target will be $77.80 alongside the 423.6% Fibo extension level.
DWAC 1-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.