Trump SPAC DWAC drops in price after big gains on social media news
The social media app will likely be developed by Trump Media and Expertise Group (TMTG).
Rafael Henrique | LightRocket | Getty Photographs
Phunware, which was concerned with Trump’s 2020 reelection marketing campaign, noticed a 470% surge in value on Friday.
There isn’t any indication that DWAC and Phunware have a enterprise relationship. However Phunware’s rise final week coincided with the spike within the SPAC’s inventory.
Quick-seller Iceberg Analysis unveiled a bearish place on the DWAC on Monday, saying that buyers face uncertainties on this blank-check deal as Trump may grow to be a dominant shareholder after the merger.
“Now that preliminary pleasure has handed, we see solely dangers for buyers in close to future. Primarily based on Trump’s observe document, at present value, renegotiation is prone to maintain extra of the merged firm for him,” Iceberg Analysis mentioned in a tweet.
“SPAC holders do not personal a bit of this challenge but. Trump has leverage, not them.”
DWAC remained a well-liked chatroom matter amongst retail merchants, who had been credited final week with turning the SPAC into the newest scorching “meme” inventory in 2021.
The DWAC ticker was the second-most fashionable identify on Reddit’s WallStreetBets chatroom on Monday, after Tesla, the electric-vehicle large that hit a $1 trillion market capitalization on the identical day, in line with different knowledge supplier Quiver Quantitative.
One trending put up on WallStreetBets on Monday mentioned “DWAC- ALL IN,” which attracted greater than 500 feedback.
SPACs, also called blank-check firms, are created to lift capital within the public equities markets, with the purpose of utilizing the money to buy or merge with personal companies.
Trump’s new social media firm, Trump Media & Expertise Group, on Wednesday mentioned it and DWAC had reached an settlement to merge in order that the previous president’s agency will grow to be a publicly listed firm.