Trump SPAC Digital World Acquisition drops 11% after huge gains on social media merger news


The social media app might be developed by Trump Media and Expertise Group (TMTG).

Rafael Henrique | LightRocket | Getty Photos

Phunware, which was concerned with Trump’s 2020 reelection marketing campaign, noticed a 470% surge in worth on Friday.

There isn’t a indication that DWAC and Phunware have a enterprise relationship. However Phunware’s rise final week coincided with the spike within the SPAC’s inventory.

Brief-seller Iceberg Analysis unveiled a bearish place on the DWAC on Monday, saying that buyers face uncertainties on this blank-check deal as Trump might turn out to be a dominant shareholder after the merger.

“Now that preliminary pleasure has handed, we see solely dangers for buyers in close to future. Primarily based on Trump’s observe report, at present worth, renegotiation is prone to maintain extra of the merged firm for him,” Iceberg Analysis stated in a tweet.

“SPAC holders do not personal a chunk of this venture but. Trump has leverage, not them.”

DWAC remained a well-liked chatroom matter amongst retail merchants, who have been credited final week with turning the SPAC into the newest scorching “meme” inventory in 2021.

The DWAC ticker was the second-most well-liked identify on Reddit’s WallStreetBets chatroom on Monday, after Tesla, the electric-vehicle big that hit a $1 trillion market capitalization on the identical day, in line with different knowledge supplier Quiver Quantitative.

One trending publish on WallStreetBets on Monday stated “DWAC- ALL IN,” which attracted greater than 500 feedback.

SPACs, also referred to as blank-check corporations, are created to lift capital within the public equities markets, with the objective of utilizing the money to buy or merge with personal corporations.

Trump’s new social media firm, Trump Media & Expertise Group, on Wednesday stated it and DWAC had reached an settlement to merge in order that the previous president’s agency will turn out to be a publicly listed firm.

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