Shares In Donald Trump-Linked Social Media Venture Surge Again

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Shares In Trump-Linked Social Media Firm Surge By 9 Times In 2 Days

Donald Trump is launching his own social media network TRUTH.

New York, United States:

A new investment vehicle linked to Donald Trump fledgling media venture soared again Friday in a frenzy. It reflects the former president’s staying power, as well as a stock market increasingly prone to casino-like tendencies.

Shares of Digital World Acquisition Corp, which is set to merge with Trump’s Media & Technology Group (TMTG) startup, surged Friday prompting a temporary trading halt for a second straight day.

Shares ends at $94.20, more than doubling its value from Thursday and more than nine times the price on Wednesday afternoon before the venture announce.

“It’s a piling in effect. Everyone is just hoping the next person who comes is willing to pay more,” said analyst Patrick O’Hare.

While Donald Trump remains a beloved figure to a sizeable minority of the US population. Pundits said he could face challenges in building the sort of “media powerhouse” described in a TMTG presentation. These includes plans for social media and streaming services.

Digital World, which trades under the ticker “DWAC” on Nasdaq, is a special purpose acquisition company (SPAC). Sometimes call it a “blank check” company because it is set up with the sole purpose of merging with another entity.

The ventures raised $293 million in an initial public offering in September.

The use of SPACs has soared in the last couple of years amid low-interest rates, as investors look for higher returns. It provides a shortcut to sell shares publicly. Office-sharing company WeWork employed the strategy to go public on Thursday.

A joint press release from the TMTG and Digital World said the companies plan to launch “TRUTH Social” a social media platform nationally early next year.

The new outlet will serve as “a rival to the liberal media consortium. Fight against the ‘Big Tech’ companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America.”

Donald Trump- New GameStop? 

Trump set the national media agenda with aggressive use of social media sites. Such as Twitter and Facebook, a technique that propelled him to the presidency, where he frequently announced policies with tweets.

But the former president was toss from both platforms after the goads his supporters into a violent takeover of the US Capitol on January 6 of this year. While falsely claiming election results were fraudulent.

In the wake of those events, Trump’s hotel business lost key deals with the Professional Golf Association, among other groups.

Following the Trump deal, Saba Capital sold most of its shares in Digital World in a reprimand of the former president, The New York Times reported.

While Trump is underestimate before, some commentators notes that TMTG will face hurdles.

In the aftermath of January 6, the conservative social media site Parler cut off from platforms. These operates by Amazon, Apple, and Google because of concerns on how it was policing content that incites violence.

Rich Greenfield, the partner at research firm LightShed Ventures, said TMTG likewise could get “boxed out”. Since it is not initially focusing on building its own Internet infrastructure.

“If it’s like Parler, they’re going to run into the same problem,” Greenfield told CNBC.

Other experts noted that successful social media firms require a growing mass of users. They post frequently, a challenge to recreate given the existing platforms.

The jump in the DWAC share price is reminiscent of outsized gains earlier this year by GameStop. Other so-called “meme” stocks that soared in ways detached from business fundamentals, O’Hare said.

“It’s gambling,” he added. “There is no fundamental reason you’re seeing the moves you’re seeing.”

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