Why Shares of Digital World Acquisition Corp Rose Today
What happened
Shares of the blank check company Digital World Acquisition Corp (NASDAQ: DWAC) rose 14% today for no apparent reason. However, the stock continued its nice run from last week after reports revealed that the Donald Trump-backed social media platform, TRUTH Social, which the company is merging with, plans to launch in February.
So what
As a
TRUTH Social is a self-proclaimed "social media platform that encourages an open, free, and honest global conversation without discriminating against political ideology." The platform is expected to be very popular among Trump supporters, many of whom believe they are being censored on more mainstream social networks like Twitter.
Following the merger announcement, shares of Digital World Acquisition Corp exploded all the way to more than $94 per share. Since then shares have fallen some on news that the deal is
Now what
A Trump-backed social media platform is definitely capable of building a big following, but the stock seems like it has run up way too quickly.
The market cap has now reached $2.35 billion, the platform has not yet launched, and there are still pending regulatory issues, so I would be wary of the stock right now. There are plenty of uncertainties, and there could be plenty of volatility ahead.
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