Shares of Digital World Acquisition (NASDAQ:DWAC) stock rose 26% yesterday on news that the planned social media app backed by former President Donald Trump plans to launch on Feb. 21.
The social media app, called Truth Social, is now available for preorder on select app stores. It seems the team behind Trump has chosen Presidents Day on Feb. 21 for the official launch. Digital World Acquisition, which is a special purpose acquisition company (SPAC), saw its stock jump more than 25% on news of the launch.
What Happened With DWAC Stock
Truth Social is being marketed as an alternative to established social media companies Twitter (NYSE:TWTR) and Meta Platforms (NASDAQ:FB), both of which banned Trump on the grounds that he helped to incite the Jan. 6, 2021 riot at the U.S. Capitol. The launch date of Truth Social was made public yesterday on the one-year anniversary of those events.
Digital World Acquisition and Trump Media & Technology Group announced last October that they planned to conduct a reverse merger that will bring Trump Media to public markets. That news sent DWAC stock up from $10 a share to $175. However, the stock price has since pulled back to its current level of $60.27. In December, investors learned that DWAC is under investigation by the U.S. Securities and Exchange Commission (SEC) over stock trading and communications with Trump’s company ahead of the SPAC announcement.
Why It Matters
Many on Wall Street see Truth Social as being critical if Trump runs for reelection in 2024. Although he has not confirmed his intent to run, many believe the former president is the frontrunner to become the Republican Party nominee in the next presidential campaign.
News that a launch date has been set for Truth Social’s app is positive news for Digital World Acquisition and moves the planned reverse merger one step closer to fruition. A date for the planned merger that will take Trump Media public has not been set, but it is expected to occur this year ahead of the midterm Congressional elections that will take place this autumn.
What’s Next for Digital World
While DWAC stock is marching higher, the shares are not likely to really take off and hold their gains until the Truth Social app officially launches and the SPAC deal that will see Trump Media begin trading on a stock exchange occurs. Until then, the SPAC stock is likely to continue moving erratically. Investors who want to support the former president or believe that Trump Media stock is a good investment might want to wait until those two key events actually happen before taking a position.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
