g5000
Diamond Member
- Nov 26, 2011
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To get his social media company, Trump Media & Technology Group (TMTG), off the ground, a Special Purpose Acquisition Company (SPAC) created by two hedge funds launched Digital World Acquisition Corp (DWAC) and succeeded in getting listed on NASDAQ.
At their IPO of DWAC, the price was at $10. Then it dropped to $9. Then meme investors lost their minds and shot the price all the way to $157.50 in two days.
The purpose of a SPAC is to raise cash and find a private company to merge with. When the merger between DWAC and TMTG was announced a few days ago, DWAC's price began dropping. It is now at $83.86. Two hedge funds are now shorting DWAC.
The merger of DWAC and TMTG will most likely result in Trump having majority control of the two, and all the money, and that is why confidence is dropping.
Even so, the market cap of DWAC is an astonishing $2.71 billion.
A textbook meme stock whose value is not determined by fundamentals but instead by hype.
TMTG has issued a presentation deck to brag about its impending launch. You will notice there isn't a single prediction of revenues. Just a lot of hype. That is pure Trump.
Will TMTG go the way of Trump Vodka? Or will it get the tens of millions of subscribers Trump claims it will get?
You can read Trump's presentation deck here: Company Overview
It has lots of pictures for Trumpies and is short on text. Classic Trump style.
More reading:
"We are short $DWAC," Iceberg said in a tweet. "Now that initial excitement has passed, we see only risks for investors in near future. Based on Trump's track record, at current price, renegotiation is likely to keep more of the merged company for him."
In a second tweet, the short seller said, "No opinion on the probability of success of TMTG. But SPAC holders don't own a piece of this project yet. Trump has leverage, not them." The tweets offered a word of caution specifically to retail investors.
Last week, at least two hedge funds that were among DWAC’s biggest investors — Lighthouse Investment Partners and Saba Capital Management — dumped shares in the SPAC after learning of its plans to merge with Trump’s company.
“Many investors are grappling with hard questions about how to incorporate their values into their work. For us, this was not a close call,” Saba Capital founder Boaz Weinstein wrote in an email statement cited by Bloomberg.
Digital World (symbol DWAC) raised $299 million on September 8 when it sold 29.9 million shares at $10 each. It appears from TMTG’s press release that essentially all the money that was raised will be available for TMTG to use. The devil will be in the details with the soon to be published SEC filings.
At their IPO of DWAC, the price was at $10. Then it dropped to $9. Then meme investors lost their minds and shot the price all the way to $157.50 in two days.
The purpose of a SPAC is to raise cash and find a private company to merge with. When the merger between DWAC and TMTG was announced a few days ago, DWAC's price began dropping. It is now at $83.86. Two hedge funds are now shorting DWAC.
The merger of DWAC and TMTG will most likely result in Trump having majority control of the two, and all the money, and that is why confidence is dropping.
Even so, the market cap of DWAC is an astonishing $2.71 billion.
A textbook meme stock whose value is not determined by fundamentals but instead by hype.
TMTG has issued a presentation deck to brag about its impending launch. You will notice there isn't a single prediction of revenues. Just a lot of hype. That is pure Trump.
Will TMTG go the way of Trump Vodka? Or will it get the tens of millions of subscribers Trump claims it will get?
You can read Trump's presentation deck here: Company Overview
It has lots of pictures for Trumpies and is short on text. Classic Trump style.
More reading:
A short seller says the party is over for Digital World Acquisition Corp. after a stunning rally, and that Trump, not the SPAC shareholders, is in control
Shares of Digital World Acquisition Corp. slumped Monday after last week's epic rally that pushed the stock into triple digits.
markets.businessinsider.com
"We are short $DWAC," Iceberg said in a tweet. "Now that initial excitement has passed, we see only risks for investors in near future. Based on Trump's track record, at current price, renegotiation is likely to keep more of the merged company for him."
In a second tweet, the short seller said, "No opinion on the probability of success of TMTG. But SPAC holders don't own a piece of this project yet. Trump has leverage, not them." The tweets offered a word of caution specifically to retail investors.
A short seller says the party is over for Digital World Acquisition Corp. after a stunning rally, and that Trump, not the SPAC shareholders, is in control
Shares of Digital World Acquisition Corp. slumped Monday after last week's epic rally that pushed the stock into triple digits.
markets.businessinsider.com
Trump SPAC Digital World Acquisition drops 11% after huge gains on social media merger news
Former President Donald Trump plans to launch a competitor to Twitter and Facebook with the help of a SPAC. The stock of that company, DWAC, exploded last week.
www.cnbc.com
Last week, at least two hedge funds that were among DWAC’s biggest investors — Lighthouse Investment Partners and Saba Capital Management — dumped shares in the SPAC after learning of its plans to merge with Trump’s company.
“Many investors are grappling with hard questions about how to incorporate their values into their work. For us, this was not a close call,” Saba Capital founder Boaz Weinstein wrote in an email statement cited by Bloomberg.
Trump’s SPAC Is A Suckers Bet
Former President Trump announced he is creating a media company that will merge with a SPAC to become a publicly traded stock. At a valuation pushing $20 billion, with no revenue or earnings, this overheated stock will return to earth.
www.forbes.com
Digital World (symbol DWAC) raised $299 million on September 8 when it sold 29.9 million shares at $10 each. It appears from TMTG’s press release that essentially all the money that was raised will be available for TMTG to use. The devil will be in the details with the soon to be published SEC filings.
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