Digital world shares explode amid expectations of Trump’s 2024 presidential bid announcement
This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Elon Musk’s takeover of Twitter removed much of the rationale for Trump’s Truth Social platform, as Digital World Acquisition Corp’s stock price plunge illustrates. (NASDAQ: DWAC), a SPAC that is expected to take the Trump Media and Technology Group (TMTG) public via a reverse merger. However, recent reports that Trump is about to officially announce his candidacy for the 2024 US presidential election appear to have rekindled bullish spirits in shares of SPAC, which serves as a proxy for TMTG and its Truth Social platform in the pre-fusion phase.
Axios reported on Friday that Trump could officially announce his 2024 presidential candidacy on the 14the of November. The former president apparently wants to use the current GOP momentum to boost his own efforts to retake the White House.
So what does Trump’s candidacy mean for the prospects of the Digital World? Well, a formal presidential bid means more users will flock to the Truth Social platform to hear Trump’s gossipy and eclectic thoughts, increasing the platform’s top metrics. This is doubly important as Trump has so far given no indication of returning to Twitter despite indications that Elon Musk is about to lift the blanket ban on the former US president. So it’s understandable that shares of Digital World were up more than 35% in the first pre-market trading session today.
As a reminder, SPAC Digital World is set to take TMTG public via a reverse merger, providing the former US president‘s media-focused entity with much-needed liquidity, including $293 million in cash from the IPO of PSPC and PIPE investments of $861.5 million. TMTG intends to use these cash resources to build a conservative-leaning media machine, which includes plans to bolster Trump’s newly launched social media platform, dubbed Truth Social, as well as launch a video on “unawakened” subscription. -request a service and launch cloud-based offerings as part of the “tech stack” product suite.
However, the merger between Digital World and TMTG has been complicated by a flurry of federal investigations, including an ongoing probe by the SEC and FINRA into allegations that SPAC management violated securities law by holding private discussions about a merger with TMTG as early as May 2021, but failing to disclose such relevant information in its public filings. The SEC also reviews reports that Rocket One Capital might have known about the impending merger between TMTG and DWAC before the public announcement. These developments forced DWAC and TMTG to try to get an extension – via shareholder approval – within the contractually agreed time frame within which this transaction must be completed. The next iteration of an extraordinary meeting of shareholders of the SAVS is now scheduled for 22n/a of novemberwhere DWAC and TMTG will again attempt to extend the deadline for completion of the merger by one year.