Could Some Unsavory Guests Derail Digital World Acquisition?

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If Digital World Acquisition Corp (NASDAQ:DWAC), the special purpose acquisition company that’s set to take Trump Media & Technology Group (TMTG) public wasn’t astounding earlier this year, it’s been leaving no room for doubt over recent sessions. As I write this, DWAC stock is up 84%, an amazing tally if you were just looking at the shares on paper.

Truth Social app logo seen on the smartphone and blurred TMTG logo on the laptop.
Source: mundissima / Shutterstock

Because on paper, DWAC stock really should be a disastrous investment. For one thing, it’s obviously associated with former President Donald J. Trump, a man who has succeeded in forcing most people to have an opinion about him, one way or another. When was the last time you came across someone who had no strong feelings about his personality or his presidency?

Second, while Trump may assert that he’s the greatest president next to Washington and Lincoln (or whatever hyperbole he chooses to deploy), according to CNN Politics, “The Donald” isn’t getting any more popular.

Typically, CNN states, “when presidents leave office, they almost immediately get more popular. The longer they are out of office, the more kindly the public tends to think of them.” However, “Donald Trump is breaking that mold, at least according to a new Marquette Law School poll of Wisconsin voters.”

Trouble for DWAC stock? Again, on paper — and if we were talking about any other person — yes, trouble would be a-brewing.

But we’re not talking about any other person. This is Donald Trump. While he certainly isn’t everyone’s cup of tea, anybody that gravitates toward his message does so with vigor.

That’s why I’m not terribly worried about TMTG’s latest scandal.

DWAC Stock Rises Above Unsavoriness

A few days ago, the Daily Beast published that in a controversial but unsurprising move, Truth Social — the social media platform undergirding TMTG — verified the account of Nick Fuentes. I can’t describe his title without getting into trouble myself. So, let’s just call him a lightly pigmented zealot.

Of course, anytime an organization associates with zealots like this, it’s asking for trouble, the kind of trouble that gets you de-platformed among other deleterious consequences. If DWAC stock was like any other SPAC, the implosion would have happened long before the business combination.

We know this because when Papa John’s (NASDAQ:PZZA) founder John Schnatter said that word, the pizza company went into full crisis mode. To my knowledge, Fuentes has said more than enough to make him toxic for at least the next decade, if not longer.

So, why didn’t DWAC stock sink on the account verification and thus validation of the aforementioned lightly pigmented zealot? My theory is that Fuentes and his ilk know how to dog-whistle up to a certain point.

It’s the same situation with Trump. While the former president said many ignorant things, he actually never said anything directly bigoted; that is, he never stated that one group of people are less than any other group. Instead, Trump dog-whistles up to the bare minimum of plausible deniability.

And plausible deniability is what keeps the modern right wing of the conservative movement going. You see, Schnatter lost plausible deniability because he said the word that cannot be uttered. The folks that essentially undergird DWAC stock know how to push buttons, all while giving themselves enough cover.

Shooting Voters

During the run-up to the 2016 election, Trump joked that he “could stand in the middle of Fifth Avenue and shoot somebody” and wouldn’t lose any voters.

“It’s, like, incredible,” he mused Like, seriously incredible.

Back when I first heard him make this remark, I took it like how it was meant to be: a joke. But over the years assessing his presidency and his non-presidency, I’m starting to think that perhaps this isn’t mere comedy. Trump could be one of those folks where nothing bad really sticks to him.

Having won a presidential election in the first place and getting darn close to a second term (from the Electoral College’s perspective), you are taking huge risks betting against DWAC stock. The man has the Midas touch. It might be the Midas touch of all toxic actors but it’s still golden.

You don’t want to lose sight of that, even if you can’t stand his politics.

On the date of publication, Josh Enomoto 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.comPublishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/03/could-unsavory-guests-derail-dwac-stock/.

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