Digital World Acquisition Corp (NASDAQ:DWAC) is back in the news today after former President Donald Trump posted to Truth Social. Before his ban from Twitter (NYSE:TWTR), the former president made plenty of headlines with his social media diatribes. Now, as the Capitol Hill hearings for the Jan. 6 insurrection are underway, Trump has turned to Truth Social to provide commentary for his followers. As a result, DWAC stock is back in focus.
What’s Happening With DWAC Stock
DWAC stock rose this morning as traffic to Truth Social increased. This bump marked the stock’s first real growth in over a month. After weeks of struggling following the app’s launch, DWAC finally got a boost when Trump began actively using the platform. While this sent shares up 18%, that growth was quick to subside, and shares haven’t risen above $45 all month.
Although DWAC stock popped earlier today, it hasn’t stayed elevated. Shares have been turbulent since late morning. As of this writing, DWAC is down 1.4% for the day.
Let’s take a look at how Trump’s actions are affecting DWAC stock.
Why It Matters
Yesterday evening, the House select committee held its first primetime hearing regarding the events of Jan. 6. “It wasn’t clear what the country could expect from the Jan. 6 select committee’s beginning presentation of its findings, but the prime-time, opening hearing Thursday night had lots of new information, and it was presented in a calm and cogent way,” NPR reported.
One of the media outlet’s primary takeaways was that the committee emphasized Trump’s role in the attack on the U.S. Capitol. It is likely for that reason that the former president took to Truth Social to respond.
Meridith McGraw of Politico tweeted screenshots of Trump’s posts, published early this morning. Throughout the posts, the former president refutes claims of his involvement in the Jan. 6 attack on the Capitol and sticks to his narrative that the 2020 election was “stolen” and “rigged.”
These aren’t likely to be Trump’s last comments on the hearings. As long as his role in the insurrection is under investigation, he likely will provide commentary and drive traffic to his platform. But does that mean DWAC stock has the potential for long-term growth? It is highly unlikely. The hearings are scheduled to proceed for two weeks, but after that, the hype around Truth Social will die down.
What It Means for DWAC Stock
This catalyst is reminiscent of previous flash-in-the-pan catalysts that have quickly pushed DWAC stock up. Shares popped 6% when the company finally submitted an S-4 filing, but the momentum proved short-lived. These trends should serve as a reminder that Truth Social has never had the potential to become a social media powerhouse. While it is popular with Trump’s base, it still operates in a niche market. It is for that reason that Truth Social will never be able to compete with Twitter.
While the outcome of the hearings is unknown, it will affect Trump’s future regardless of the verdict. Investors should steer clear of DWAC stock. Both Trump and Truth Social are too unpredictable to make for a stable investment.
On the date of publication, Samuel O’Brient 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.
