DWAC stock plummets after Trump picks in Midterms Fizzle

DWAC stock plummets after Trump picks in Midterms Fizzle
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Digital World Acquisition Corp. (DWAC) shares tumbled early Wednesday as the special-purpose acquisition company took a hit after Tuesday’s midterm elections were read by some as a rejection of candidates backed by former President Donald Trump.


With several key races still undecided, Republicans appear poised to secure a narrow majority in the US House of Representatives. The election results, however, fell far short of the GOP’s expectations of a “red wave” that would bring majorities to both houses of Congress. With a number of Trump-backed candidates underperforming, several Republican political observers have hypothesized that voters have angered the former president.

DWAC aims to bring the former president’s technology and social media platform to the public in a sort of reverse merger that was popular a few years ago. DWAC stock fell 19% on Wednesday market trade. shares skyrocketed by almost 70% on Monday on news Trump will announce another candidacy for the White House this month.

At a rally Tuesday night in Ohio, Trump said he would make a “very big announcement” next week.

“I’m going to make a very big announcement on Tuesday, November 15,” Trump said before the election results came in.

DWAC stock and the Trump brand

The future of DWAC and its efforts to take Trump Media and Technology Group public are closely tied to the value of the Trump brand. Trump Media is the parent company of conservative social media platform Truth Social.

The victories of Trump-backed Senate candidates JD Vance in Ohio and Ted Budd in North Carolina were positive for the Trump brand. But a long list of losses raises questions about Trump’s dwindling performance, with Mehmet Oz losing his Senate bid in Pennsylvania and Trump’s protégé Kari Lake lagging late in the still-tie Arizona governor’s race.

Given the doubts raised by the interim results, another presidential bid is the clearest short-term way to boost Trump’s brand appeal.

DWAC shares shot up after SPAC late last week a shareholder vote delayed – for the sixth time – on whether to approve a one-year extension to complete the merger with Trump Media.

The shareholders’ meeting is now scheduled for 11/22. DWAC’s deadline for completing its merger with Trump’s company was originally in early September. However, SPAC has claimed that an investigation into the transaction by the Securities and Exchange Commission delayed the process.

DWAC financial difficulties

With DWAC shareholders unable to complete a vote in September, SPAC sponsor, ARC Global Investments, contributed approximately $2.9 million to extend the merger deadline to December 31. 8, according to federal records. Arranged by DWAC management, the vote offers shareholders an opportunity to extend the deadline to September 9. 08/08/2023.

Now that DWAC has the funding, the SPAC has until 8/12 that Get the votes to approve the extension.

DWAC has warned investors that the company could potentially go out of business and liquidate shares if the one-year extension is not granted.

Federal files also show the SPAC is bleeding cash. In an SEC filing, DWAC revealed that between Sept. 19 and Sept. 23, it had received termination notices from investors in private public equity investments (PIPE) worth approximately $139 million.

This comes after DWAC said in its quarterly report dated 23/08 that it had lost $6.2 million in the first half.

DWAC stock with Musk in charge of Twitter

DWAC stock performance this week comes as follows Tesla (TSLA) boss Elon Musk is now officially responsible for Twitter.

Musk began running the social media platform with mass layoffs, cutting roughly 50% of the company’s workforce. He also introduced a $7.99 monthly fee that includes blue check verification and other social media perks.

musk 19.5 million Tesla shares sold for $3.95 billion on 4/11, 7 and 8, according to SEC filings late Tuesday. The decision to sell some of his Tesla shares comes just days after Musk completed his $44 billion purchase of Twitter.

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Musk has signaled that people who have been banned from the social media platform, including Trump, may be reinstated. This could be a death knell for Truth Social, but Trump has said he plans to remain on his platform.

“I’m sticking to the truth,” Trump told Fox News Digital in late October.

“I like Elon but I’m sticking to the truth,” he added.

DWAC stock far from highs

Truth Social started after Twitter discredited Trump’s account following the 6/19 US Capitol riot. Some industry observers claim that a return to Twitter could divert a large portion of Truth Social’s audience to the mainstream channel.

DWAC stock is down 90% from Oct. 1. January 2021, high of 175, marked shortly after news of the Trump merger first broke.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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