""SPAC Stock"" – Google News
(Bloomberg) – Saba Capital Management swiftly sold its entire stake in unrestricted shares in blank check company Digital World Acquisition Corp. on Thursday. sold after it was revealed that it was planning to merge with former President Donald Trump’s new media company.
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“I knew it was right for Saba to sell our entire stake in unrestricted shares, which we did now,” founder Boaz Weinstein said in an email. “Many investors struggle with difficult questions about how to incorporate their values into their work. It wasn’t a close thing for us. “
Saba has invested in more than 400 SPACs, or special purpose vehicles, according to the New York Times.
The quick exit from the free camp cost Saba. Digital World rose 357% Thursday after retail investors invested in the stock. The price doubled to a record on Friday, jumping almost 10 times over two days.
Saba is one of several hedge funds that bought into Digital World, led by Chief Executive Officer Patrick Orlando, in September. Others include Highbridge Capital Management, Palm Beach, Florida-based Lighthouse Investment Partners, and DE Shaw & Co., according to data compiled by Bloomberg.
Lighthouse said it no longer holds unrestricted shares in the SPAC. DE Shaw has also sold all of its unrestricted shares, according to a person familiar with the matter.
Read more: Moneyman behind Trump’s media company runs a company in Wuhan
Trump announced late Wednesday that the deal will allow him to build a new social media presence after Twitter and Facebook banned him from their platforms after the January Capitol Uprising. The new company will be named Truth Media, according to a statement from Trump Media & Technology Group, which plans to open the new business in the first quarter before the 2022 mid-term elections.
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Hedge funds have rushed to invest in SPACs in recent years. You have the option of redeeming shares for cash at the time of a merger, which makes the trades relatively low-risk. Warrants that are issued to investors as part of the IPO, in connection with the possibility that the units are traded above the redemption price, offer price gains.
The funds are often little involved in the management of a SPAC or its target selection.
Weinstein’s wife, Tali Farhadian Weinstein, narrowly lost the Democratic nominee for the Manhattan prosecutor this year.
(Adds the amount of the two-day increase in the fourth paragraph. The attribution in the sixth paragraph has been corrected in an earlier version.)
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