There is no doubt that former president Donald J. Trump is a real estate mogul. He is a multi billionaire with many real estate holdings around the world, key among them being the iconic Trump Tower in New York. After vacating the office of the POTUS, not much has been heard from Trump except reposting of his press releases. Recently, however, major media outlets around the world have been flooded with stories and interviews about the Trump SPAC. This is one of Trump's major successes and is bound to make him a lot of money. Read further to learn more about the company.
Trump SPAC Explained
A special acquisition company (SPAC) is a type of blank check company, more closely related to an exchange traded fund than it is to a traditional company. A blank check company contains several types of securities that can be structured to fit the investment goals of the shareholders. One of these types of securities is called an "unit". A unit can be viewed as similar to a share of stock, except that instead of giving you ownership in an actual company, it gives you limited rights to certain assets of the company. These rights are limited because they are usually restricted to receiving proceeds from certain sale transactions of the company.
The Trump SPAC was created with the intent to use the proceeds from the sale of units to buy up portions of other companies by buying large numbers of their shares on the market. The Trump SPAC will also use the proceeds from sale of units on other transactions like acquisitions or paying down debt.
Trumps new venture is a special acquisition company known as Digital World Acquisition Corp. The SPAC trades under the ticker - DWAC - on Nasdaq and other major exchanges. All the frenzy about the Trump SPAC emanates from the recent announcement of DWAC acquisition of TMTG. After the announcement the company stock grew by more than 800% in the first two days of the announcement. So far, the stock has grown by over 1,000% and has been compared to the AMC and GameStop stock by Reddit's WallStreetBets. It is interesting to note that it's not just DWAC stock that is rising fast at the moment. Phunware, a software startup massively involved in the Trump campaign also saw a rapid rise in stock prices due to the Trump effect.
How He is Backing the SPAC
Trump has gone public to dismiss major social media companies for banning him, noting that while the Taliban thrives on social media, major companies have banned him from their platforms. His goal was to acquire TRUTH social, a social media giant that can take on big tech. Going public with his statements is what attracted tech investors and his followers and convinced them to purchase this meme stock. DWAC announced that it would be acquiring the Trump Media & Technology Group popular for its Miss Universe Pageant rights.
In a press conference at the White House Rose Garden, Donald Trump stated that this issue is a matter of life and death. “You would think a company like Facebook would understand the seriousness of a threat like ISIS. The fact remains that Facebook banned me from their platform.”
“I have been calling for a major investigation into these companies that have been silencing so many voices,” Trump said. “They are controlling what we can and cannot see. It’s a dangerous thing when they are controlling your information.
Main Product and Current Valuation
The main product that will be coming out of the Trump SPAC - DWAC - is TRUTH Social. A social media platform that will stand up for the truth. Initially, DWAC was valued at just $10 per share and had little in form of cash. Currently, however, stock prices have risen rapidly to over $94. This gave the SPAC a market valuation of $4.05 billion from just $300 million. Since the social media platform is actually under development, and the company is backed by $293 million in liquid cash, a lot of price changes are expected. The company stock closed at $83.86 on Monday at the Nasdaq. Stock prices are likely to move up once TRUTH Social becomes fully operational.
Over 60% Of Republicans Plan To Use Trump’s TRUTH Social, Poll Suggests
Truth Social Launch Planned for February 21st
Former President Trump plans to launch his new social media app on President's Day February 21st, called Truth Social. The venture now public through a SPAC with Digital World Acquisition (DWAC) is much anticipated. The stock of DWAC jumped last week and continues to move higher with the announcement. The platform will be a competitor to Twitter and Facebook similar to Parler or Gettr.