Trump Loves Truth
While Trump cheered Musk's takeover by saying he is "very happy that Twitter is now in sane hands," he also underlined his dedication to his own platform, saying "I LOVE TRUTH!"
He also appeared on the platform as an interview guest of conservative commentator Tucker Carlson. The interview ran opposite the Republican primary debate, and currently has been viewed around 265 million times.
Nevertheless, Trump has consistently committed himself to his own site, which is important to the future of his own product given he is a massive social media draw.
With Trump running for president once again, and currently the clear GOP frontrunner, it could give his platform a boost in traffic and sign-ups.
$Digital World Acquisition Corp(DWAC)$ Stock Clears This Hurdle
On July 21, DWAC surged 50% after the SPAC reached an $18 million dollar fraud settlement with the U.S. Securities and Exchange Commission.
The settlement stipulates DWAC must pay $18 million in civil penalty fees if it completes its merger with TMTG. However, if the merger does not happen before Jan. 1, 2025, and if DWAC returns investor funds, the SEC has agreed to waive the penalty.
The SEC alleged improper merger discussions had taken place before an initial public offering filing.
Legal Woes Plague Trump, Boost DWAC
While DWAC stock is closely tied to the value of the Donald Trump brand it has showed resilience despite the scandals enveloping the former president.
While federal charges could potentially tarnish that brand, according to company filings, this has yet to be the case.
A grand jury voted to indict Trump on March 30 after hearing evidence he allegedly paid hush-money to porn star Stormy Daniels during the 2016 election.
This is first time in history a former U.S. president has faced criminal charges. Trump pleaded not guilty to 34 felony counts of falsifying business records at a criminal court in in Manhattan on April 4.
DWAC stock surged the day after the indictment was announced, helping the stock move back toward its 50-day moving average.
Since then Trump has pleaded not guilty in federal court in Miami to charges brought by Special Counsel Jack Smith that he unlawfully kept classified national security documents after leaving office and lied to officials who tried to recover them. He also pleaded not guilty to charges he conspired to defraud the U.S. by stopping Congress from certifying Joe Biden's 2020 election victory and to deprive voters of their right to a fair election.
And in August he was indicted by a Georgia grand jury on 13 charges. It is claimed he "unlawfully conspired" to change the election outcome while participating in a "criminal enterprise." However Trump denies all of the charges.
As if that wasn't enough, he is also embroiled in a $370 million civil lawsuit in New York. A ruling is expected in this case by Jan. 31.
DWAC Stock Analysis: Stock Soars After Iowa Win
The IBD Stock Analysis shows inherent problems with the stock.
It has seen its Relative Strength Rating rise to 82 out of 99, which puts it in the top 18% of stocks in terms of market performance over the past 12 months.
DWAC stock crashed 70.8% in 2022, dreadful performance by anybody's standards, but ended 2023 up 16.7%. This lagged the S&P 500's gain of more than 24.2%.
So far this year it is far outperforming the benchmark index. It has risen 27.7% so far in 2024, while the S&P is roughly flat. It was boosted by a 29% gain on Jan. 16, the day after he notched a record-setting win in the Iowa caucuses as he tries to win the 2024 Republican presidential nomination.
DWAC stock now sits far above its 50-day moving average blasting nearly 31% above the key benchmark.
Nevertheless, it remains down more than 82% below its all-time high of 175, which it reached in October 2021.
The hype around Trump has allowed the stock to vault to dizzying heights, but it has ended up plummeted back to Earth every time so far.
Donald Trump Stock Misses This Key Ingredient
But the CAN SLIM cognoscenti look for stocks that boast consistent earnings growth. This is another area where DWAC stock falls short. Its lack of earnings has netted it an EPS Rating of 2 out of 99.
In addition, there are no analyst earnings estimates for the ultimate Donald Trump stock.
Given the company has yet to merge with Trump Media & Technology Group, this remains a speculative play. It is a bet that the firm will be able to successfully complete the merger and then turn its hype into earnings performance.
While this is certainly possible, there are lots of hurdles along the way. Not least the fact Trump is entering an arena dominated by giants such as Facebook, X, TikTok and Snap (SNAP).
One thing in its favor is improving institutional sentiment. It holds an Accumulation/Distribution Rating of B+, which reflects more buying than selling among funds in recent weeks. But overall fund ownership remains extremely low.
DWAC Stock No Ordinary SPAC
Firms that went public via mergers with special purpose acquisition companies have struggled.
Speculative stocks in general have been getting punished as the Federal Reserve dials back its accommodative policies.
It is worth bearing in mind that SPACs have underperformed against the broader market by 25% during the past decade, according to University of Florida IPO expert Professor Jay Ritter.
According to MSCI, SPACs are able to go public more quickly and inexpensively, and with "far less regulatory or investor scrutiny." They are also more likely to be managed by a controlling shareholder than conventional IPOs.
"In most other regards, however, investors in these SPAC combination companies faced essentially the same corporate governance risks as investors in any other recent IPO," analyst Nilufar Kuchimova said in a research note.
Is The Ultimate Donald Trump Stock A Buy Now?
Right now, buying DWAC stock is more akin to gambling than investing. The firm has no earnings history to speak of, though the stock price has been rallying. The fact that Elon Musk, one of the world's most feted entrepreneurs, is a competitor makes the road ahead for Truth Social even more challenging.
While it managed to get another one-year extension to complete the merger further, challenges remain, despite the fact Trump's Iowa victory gave the stock a big one-day boost. Because of this, DWAC stock is not a buy at the moment.
Source: https://www.investors.com/research/donald-trump-stock-buy-now-trump-media-technology-group-tmtg-stock-dwac-stock-spac/
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