Trump SPAC skyrockets as much as 1,657% since deal was announced
1 month ago 2 min read
Shares of the shell company that Trump’s new media company plans to merge with surged as much as 284% on Friday, prompting a series of trading halts for volatility. In recent trading the company, Digital World Acquisition Corp., was up 105%.
At its peak of $175 on Friday, the Nasdaq-listed company was a staggering 1,657% above its Wednesday closing price.
The new Trump entity is merging with Digital World Acquisition Corp., which closed at just $9.96 on Wednesday. The stock quadrupled on Thursday and then climbed as high as $131.90 Friday morning.
“This is extremely unusual, especially now,” said Matt Kennedy, senior IPO market strategist at Renaissance Capital. “We saw significant pops during the height of the SPAC bubble. Nowadays it’s rare to see a SPAC pop more than 10%.”
Normally, SPAC merger announcements contain financial projections and details on the capital structure. In this case, there was merely a press release and an investor presentation that contained no estimates on how much money the company could bring in.
“This is clearly meme stock territory. It’s totally disconnected from fundamentals. There are no known fundamentals,” said Kennedy, who warned investors that $10 should be looked at as the floor for this stock.
“Be prepared to lose potentially everything else,” he said. “This is a stock trading purely on momentum.”
The Trump SPAC is attracting interest from traders at WallStreetBets, according to Swaggy Stocks, which tracks mentions on the Reddit page. WallStreetBets is the Reddit group at the heart of the GameStop saga earlier this year.
The bonanza comes despite the fact that the latest filings do not indicate how much revenue — if any — Trump Media & Technology Group generates. It’s likely to be minimal, given that the firm’s social media platform has not launched yet.