• Digital World Acquisition Corp. (DWAC) stock is down 73% from its 52-week high of $175 a share.
• The launch of Donald Trump’s Truth Social app has not gone as planned.
• The reverse merger that would bring Trump Media and Technology Group public has now been thrown into doubt.

When evaluating Digital World Acquisition Corp. (NASDAQ:DWAC) stock, I can’t help but think of the catchphrase made popular by Star Trek‘s Dr. Leonard McCoy: “It’s dead, Jim.”

There’s no other way to describe the special purpose acquisition company (SPAC) that’s expected to take public former President Donald Trump’s ill-fated social media venture, Trump Media and Technology Group. The crown jewel of Trump Media was supposed to be Truth Social, a Twitter (NYSE:TWTR) clone meant to give the former president and his supporters a public platform. However, two months after its launch, Truth Social is a resounding failure, with nobody using it, not even Trump himself. Consequently, DWAC stock has fallen 73% from an all-time high of $175 per share down to its current level of under $50.

Most of the decline has occurred since early March after it became clear what a disaster Truth Social is turning out to be. There are also mounting concerns that U.S. regulators may not even approve the reverse merger with Digital World Acquisition Corp. that would bring Trump Media and Technology Group public, putting additional pressure on DWAC stock.

Deafening Silence

The Truth Social app launched to much hype and fanfare on Feb. 21 (President’s Day). In the lead up to the launch, Trump stated publicly that “I created Truth Social to stand up to the tyranny of big tech. We live in a world where the Taliban has a huge presence on Twitter yet your favorite American president has been silenced.”

Of course, Trump is referring to the fact that he has been banned from Twitter and most other social media platforms following the Jan. 6, 2021 Capitol Hill riot. And while expectations were running high for Truth Social, less than two months after its debut nobody appears to be using the platform.

The Truth Social app is reportedly not available on Android phones and there’s nearly 1.5 million people sitting in a “waiting room” to use Truth Social. Trump himself has so far only issued one “truth” (the equivalent of a tweet), saying simply: “Get ready! Your favorite President will see you soon!” Devin Nunes, Truth Social’s chief executive officer, said that he hoped to have Truth Social “fully operational” by the end of March. But halfway through April, there has been no improvement with Truth Social. The app has fallen well outside of the most downloaded apps, according to industry data.

Joshua Tucker, co-director of New York University’s Center for Social Media and Politics, told BBC News regarding Truth Social: “It’s been a disaster.” Other commentators have described the botched launch in less polite terms.

The Future of DWAC Stock

The big question now is what becomes of the Trump Media and Technology Group and its planned reverse merger with Digital World. Will the SPAC deal still proceed given that Truth Social has proven to be a complete dud? If yes, what will the timing of the deal look like? The fate of Trump Media got murkier recently after several high profile executives quit Truth Social. Josh Adams, the chief of technology, and Billy Boozer, the head of product development, each stepped down on April 4. The departures support the view that Truth Social may not continue as a going concern.

Beyond all the problems with Truth Social, there are also mounting concerns that the U.S. Securities and Exchange Commission (SEC) may not allow the planned reverse merger with Digital World Acquisition Corp. proceed. The SEC, which has been scrutinizing all SPAC deals more closely since last summer, has announced that it is investigating Digital World Acquisition. While no charges have been laid against DWAC or anyone associated with Trump Media, any reverse merger is likely to be put on hold until the SEC finishes its investigation and gives its blessing to the deal.

Currently there is no timetable for either the SEC investigation to conclude or the reverse merger between Digital World and Trump Media to occur. The whole process is shrouded in a fog of uncertainty.

Stay Far Away From DWAC Stock

Investors interested in buying Digital World Acquisition Corp. stock need to ask themselves what exactly they are purchasing. If Truth Social is the unmitigated disaster that it’s being made out to be, then what does the Trump Media and Technology Group have to offer investors? What business is behind the company’s name? And if there’s nothing behind Trump Media, then what are investors getting from buying shares of Digital World Acquisition ahead of a reverse merger that may never happen?

Given all the problems associated with former President Trump’s foray into social media, it should be obvious that investors need to stay far away from Digital World Acquisition Corp. DWAC stock is not a buy.

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.