Trump-affiliated SPAC stock rises over 460% on social media deal


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The shares of Digital World Acquisition Corp., listed on the New York Stock Exchange. – the special purpose vehicle that announced its merger with the new social media company of former President Donald Trump on Wednesday evening – rose by more than 460 percent on Thursday.

DWAC’s share price began trading at $ 12.73 per share Thursday, reaching as high as $ 58 by 1:45 p.m. ET, up more than 460 percent.

The company’s shares halted around noon due to volatility, the stock rose more than 134 percent and again around 1pm

The stock stopped trading at $ 50.17 per share at 1:49 pm as it was rapidly losing profits, but it still ended the day 383 percent at $ 49.08 per share.

The surge appeared to have been driven by amateur traders when the Reddit crowd that sparked the frenzy in GameStop stock earlier this year apparently showed up.

DWAC was the most traded stock on the Fidelity platform, with well over 30,000 buy orders earlier in the day outperforming sell orders by three to one.

The stock had more than three times the buying interest than Tesla, the second most-bought stock on Fidelity, and more than six times the demand for the ProShares Bitcoin Strategy ETF on Thursday.

DWAC was also the most mentioned company on the popular amateur trading chat room Stocktwits and was widely featured on Reddit’s WallStreetBets forum and even rivaled GameStop and AMC for the most mentions in the past 12 hours.

Trump’s newly founded company, Trump Media & Technology Group, announced on Wednesday evening that it would merge with DWAC and take its place in the public markets.

Former President Donald Trump announced plans on October 20, 2021 to launch his own social networking platform called “TRUTH Social”.AFP via Getty Images

TMTG announced that it will launch a new social network called TRUTH Social, which will start in the beta phase for “invited guests” next month and go online nationwide in the first three months of 2022.

Its mission is to “create a rival for the liberal media consortium and fight against the ‘big tech’ companies of Silicon Valley who have used their one-sided power to silence opposing voices in America,” it said.

DWAC is a SPAC, or what’s called a blank check company, an increasingly popular financial system where a company goes public to raise funds from investors and then buys a private company that allows it to take the SPAC’s place in to occupy the public’s markets.

The merger agreement would TMTG “with an initial enterprise value of 875 million share price after the business combination,” said the press release on Wednesday.

“Trump Media & Technology Group’s growth plans will initially be funded by DWAC’s trust assets of $ 293 million (excluding redemptions),” the statement said.

Ex-President Donald Trump Trump Media & Technology Group announced that it will merge with DWAC and take its place in the public markets.AFP via Getty Images

TMTG has not yet named any executives or employees.

Patrick Orlando, CEO of DWAC, praised TMTG as “one of the most promising partners for business combinations to serve this purpose”.

“Given the overall addressable marketplace and President Trump’s large following, we believe the TMTG opportunity has the potential to create significant shareholder value,” he added.

Orlando is a former employee of investment banks, including Deutsche Bank, where he specializes in emerging market fixed income derivatives.

He is currently affiliated with at least three other SPACs: Yunhong International, Benessere Capital Acquisition and Maquia Capital Acquisition.

TMTG’s mission is to “create a rival for the liberal media consortium and fight back against the ‘big tech’ companies of Silicon Valley”. AFP via Getty Images

One of its SPACs, Yunhong International, is registered in the Cayman Islands, a popular tax haven, and its headquarters are listed as Wuhan, China, the original epicenter of the COVID-19 pandemic.

In May, Yuhong International said it had reached an agreement to float Giga Energy, a Chinese green energy company, but it later fell apart.

DWAC’s CFO is Luis Orleans-Braganza, a member of the Brazilian National Congress and a supporter of right-wing extremist President Jair Bolsonaro.

Orleans-Braganza is also a member of the late Brazilian royal family.

DWAC is also financially supported by big Wall Street names, according to financial statements.

After the Blankoscheck company went public, but before the announced deal with Trump, large hedge funds such as DE Shaw, Highbridge Capital Management, Lighthouse Partners and Saba Capital Management have reported holding important stakes in SPAC.

No one immediately responded to The Post’s request for comment.

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