The stock price of Miami-based Digital World Acquisition Corp. (DWAC), the special purpose acquisition company (SPAC) that will enable the Trump Media & Technology Group (TMTG) to go public through a merger, jumped over 400% on Thursday to hit a high of $52 (Oct. 21) in what some might see as validation for former United States President Donald Trump.
DWAC’s stock traded on the Nasdaq GM surged 356.8% to close at $45.50 per share and trading was halted multiple times due to volatility as retail investors piled on. More than 470 million shares of DWAC changed hands during Thursday’s session, according to FactSet. That compares with average trading volume of about 11 million shares for Twitter, which trade at around $65. And DWAC was the most-traded stock in the US equity market Thursday, according to TradingView data.
Trump said Wednesday (Oct. 20) that he’s launching a new social media network called TRUTH Social as a rival to the Big Tech companies.
“I created Truth Social and TMTG to stand up to the tyranny of Big Tech,” Trump, chairman of TMTG, said in a statement.
“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable. I am excited to send out my first TRUTH on TRUTH Social very soon. TMTG was founded with a mission to give a voice to all. I’m excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech. Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!” the ex-president added.
Truth Social is slated to debut in beta form next month, with a nationwide rollout planned for the first quarter of next year. The app is available for pre-order on Apple’s app store.
In addition to the Truth Social app, TMTG said it is planning a video-on-demand service dubbed TMTG+ that will feature entertainment programming, news, podcasts and more
Trump’s new venture comes following speculation that he would launch his own social media site
after he was banned or suspended from nearly every major platform, including Facebook, Twitter, and Alphabet’s YouTube. But the 45th president has built a loyal following, and many of his supporters are likely to follow him to his new platform.
DWA said it has raised roughly $293 million in cash to build and grow Truth Social and TMTG’s other ventures.
DWAC CEO Patrick Orlando said the funds will fuel “TMTG’s scale up, including to provide world class leading technology services to build strong and secure social networks and diverse media offerings. Given the total addressable market and President Trump’s large following, we believe the TMTG opportunity has the potential to create significant shareholder value.”
Among the company’s biggest shareholders are several institutional investors, including Lighthouse Investment Partners, D. E. Shaw & Co., and Radcliffe Capital Management, according to an SEC filing.
The Digital World transaction values Trump Media at an initial $875 million.
DWAC surges for second day
DWAC shares soared again on Friday (Oct. 22), and trading in the company was halted multiple times on the Nasdaq due to high volatility. The stock closed Friday at $94.20, more than nine times its initial price, after earlier hitting a high of $175. The stock also traded about 130 million shares on Friday, surpassing the free float of 22.8 million shares, based on Refinitiv data.
Retail investors embraced the former president’s new social media venture. “YOU ARE SITTING ON A GOLD MINE!!!!,” wrote one poster on Reddit’s website devoted to the stock. “I’m not selling! Twitter banned the president and allowed the Taliban to have an account! This is more than just a stock! This is about your digital freedoms! We’re just getting started!!!”