There are many reasons to believe Digital World Acquisition (NASDAQ:DWAC) stock should continue to trade near current levels. What’s more, it’s difficult to imagine that current polarization isn’t high among those reasons.
Digital World Acquisition is a special purpose acquisition company (SPAC) bringing former President Donald Trump’s Truth Social social media platform public. Trump is about as polarizing a figure as there is in many respects. Most either love him or hate him. Therefore, most things he represents — including businesses — are polarizing as well.
That said, given that liberal and conservative media remain at odds, Truth Social should sustain an ardent base moving forward. In turn, then, DWAC stock should also be able to maintain its current price levels at around the $70 mark. If they understand the ethos behind bring this company public, investors will likely see why the price won’t fall anytime soon.
DWAC Stock: Ideological Investing
Ideological investing — that’s how I would characterize the capital currently buoying DWAC stock prices. Essentially, it seems like investors are putting capital behind what Truth Social will represent.
Per the company’s investor presentation, that means a strong push back against the “liberal media consortium.” Investors who are putting their money behind the SPAC are making a statement. They believe that if big tech can censor the former President of the United States, then First Amendment protections are being eroded.
Of course, each individual has their own take on Twitter (NYSE:TWTR) banning Trump. And each individual is free to agree with the ban or not. But my point is this: the ideological divide in the United States simply feels unrelenting. Opinions haven’t changed since then. If you thought the ban was a breach of the First Amendment back when it happened, you likely still do now.
That visceral emotion is powerful. And it means that capital should logically continue to back DWAC stock. In other words, the voices that will back Truth Social should be as strong now as they ever were.
That also begs the question of when Truth Social will be available to the public for use.
A Big Shift
Right now, the Truth Social app is set to be available on President’s Day, Feb. 21. Early indications are that it will be out on iOS on that date. However, the same report does not clarify whether it will be available for Android and the web on the same day.
What is perhaps more interesting, though, is that Truth Social is reported to feature a similar design to Twitter. Of course, Trump was infamous for utilizing the Twitter platform during his presidency.
That aside, there’s another reason to consider investing in DWAC stock: the underlying sea change in media.
Truth Social potentially represents a massive change already underfoot. It isn’t only the far-right that’s pushing back. It is also the more moderate portions of the populace as well. As such, it’s fair to assume that Truth Social should gain some early traction with conservatives who still may not align with Trump on all issues.
And that is a rising tide. As more and more stocks are aligning with that notion, DWAC stock and Truth Social could rise much higher on this alone.
The Bottom Line on DWAC Stock
Truth Social anticipates that it could see 15 million potential monetizable users. It has made no assertions about the long-term revenue implications of such a user base. But that’s also sort of the point: no projections really matter now.
Projections are simply guesses. It’s all about the ideological shift and the undercurrent as it relates to media.
Whether you like Trump or not, the appeal of Truth Social may really tap into something. That’s why I believe investor capital will continue to at least keep DWAC stock as high as it is right now. It will divide along ideological lines, but that doesn’t mean demand won’t be there.
On the date of publication, Alex Sirois did not hold (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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.