With rate hike fears knocking stocks across the board, even Digital World Acquisition (NASDAQ:DWAC) stock has taken hit.

However, unlike other meme plays, DWAC stock continues to see relatively less impact from recent changes in market sentiment.

For one, while down in recent days, it remains up nearly 57% year-to-date.

Compare that to the drops seen with other “hot” special purpose acquisition companies (SPAC) and former SPACs, like Lucid Group (NASDAQ:LCID).

Based on the fact it continues to be resilient, it appears the market remains confident in this blank-check company, and its deal to merge with Trump Media & Technology, former President Donald Trump’s social media startup.

Even so, it remains questionable whether it will stay strong in the months ahead. In past coverage, I’ve talked about many things that could sink it down to lower prices.

On top of these risks, are some others that could have a similar impact to its price performance.

Also consider that paying up for early-stage stocks is looking less favorable, based on higher interest rates has fallen out of favor. With more indicators pointing to not buying it now than buying it now, a cautious approach to it is best.

The Latest With DWAC Stock

So, why has Digital World only seen a modest drop, while other speculative plays have plunged? As was the case before, the launch of Trump Media’s Truth Social platform could be playing a role.

Or is it? News of Truth Social planning to launch on President’s Day helped DWAC stock shoot up from the mid-$50s to over $80 per share. Since then, though, news about Truth Social has been more negative than positive.

A recent Washington Post headline suggested that the site may not be operational until months after its tentative Feb 21 “go live” date.

Trump Media’s reaching out to social media influencers, in attempt to get them to “reserve” their spot on the platform (as reported by Axios) could be a smart business move. Or, it could be a sign of desperation.

Admittedly, it’s no surprise the media is critical of the former president’s latest venture.

Still, the uncertainty over whether Truth Social ends up as one of Donald Trump’s successes or failures continues to make paying top dollar for it (which you’re doing if you buy Digital World today) questionable.

That’s not all. There are also a myriad of other reasons that could push the stock back to lower prices.

New Concerns Atop Existing Ones

Since DWAC stock rocketed in price, following news of its Trump deal, I’ve pointed out several reasons why you may not want to hop aboard this particular Trump train.

For instance, following its move from $10 per share, to high double-digit prices, there’s a high implied valuation attached to this SPAC merger.

When it was trading for between $50 and $60 per share, this implied valuation went over the $10 billion mark.

At current prices (around $70.50 per share), it’s even higher. Besides the prospects of buying into a pre-revenue company at an eleven-figure valuation, there’s another key risk.

Potentially high dilution, caused by the convertible securities issued in its private investment in public equity (PIPE) capital raise. Atop these existing concerns, there may be a new one.

You may be aware that the U.S. Securities and Exchange Commission (SEC) is investigating the TMTG deal. Specifically, whether Digital World was in talk to do a deal with Trump before it went public.

So far, again seen from its strong stock price performance, the market hasn’t worried too much about this investigation.

But as a Seeking Alpha commentator argued last month, there may be enough evidence to show that this SPAC was created for the sole purpose of taking Trump’s venture public.

If this proves true, the SEC will likely try to stop the deal. This in turn will cause shares to drop below their offering price ($10 per share).

I would do my own research before saying the commentator’s argument is correct. Even so, this is yet another red flag that points to there being more downside risk than upside potential with DWAC stock.

Bottom Line: Stick to Situations With Fewer Unknowns

Put simply, too much with Digital World is a leap of faith. It’s possibly questionable whether this merger goes through. It’s unknown when Truth Social will launch. Not to mention, whether it will be a success or a flop.

If DWAC stock were trading at a discount to its offering price, it would perhaps be worth it as a moonshot play. But as it continues to hold onto most of its “to the moon” gains? Stick with situations with far fewer unknowns.

On the date of publication, Thomas Niel 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.

Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.