Digital World Acquisition (NASDAQ:DWAC) stock is finally back in the green after a difficult month. The special purpose acquisition company (SPAC) partner of the Trump Media & Technology Group (TMTG) hasn’t had much good news to report lately. With former President Donald Trump under multiple federal investigations, it’s easy to see why shares have been highly volatile. Today, though, the primary product of TMTG — Truth Social — announced it will advertising on Rumble.
Conservative video-sharing platform Rumble has been thriving while Truth Social struggles to remain relevant. Last week, blank-check partner CF Acquisition Corp VI (NASDAQ:CFVI) shot up after Rumble reported record user growth. While these two Trump trades often moved together in early 2022, the tides have since shifted. Trump’s waning popularity impedes DWAC stock’s growth. Even after Elon Musk abandoned his plans to acquire Twitter (NYSE:TWTR), Truth Social has been unable to secure market share.
Advertising on Rumble might seem like a logical step forward. But a closer look reveals that it likely won’t make a difference for Trump’s social media platform.
Can Rumble Help DWAC Stock?
Can Rumble help Truth Social and DWAC stock? In short, not really. For one, Digital World isn’t even that optimistic about Donald Trump of late. The blank-check company is considering delaying the deadline of its merger due to Trump’s declining popularity. Digital World recently submitted a securities filing that laid out the following:
“If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG’s results of operations, as well as the outcome of the proposed Business combination, could be adversely affected.”
That brings us to the main problem facing Truth Social; Trump’s content is the primary thing driving users to the platform, but the former President’s popularity is diminishing. Advertising on Rumble would make sense if TMTG needed to inform prospective users about Truth Social. But a lack of awareness of the platform isn’t what’s impeding its popularity.
TMTG CEO Devin Nunes says that “By partnering with Rumble Ads, Truth Social is poised to displace the Big Tech platforms as a superior venue for businesses to connect with an extraordinarily engaged audience of millions of real people.” But Truth Social has spent months failing to displace Big Tech. Rumble’s users are already well aware that Truth Social exists. If they wanted to join, they already would have.
The Bottom Line on Digital World Acquisition
Since TMTG has no products other than Truth Social, the success of DWAC stock is completely dependent on the platform. The recent FBI raid of Trump’s Mar-a-Lago estate caused a surge in Truth Social downloads, but that hasn’t been enough to send DWAC stock up.
Digital World has spent a lot of time ignoring the root cause of its problems and attempting to distract investors. The Rumble partnership is no different — and it likely won’t help.
On the date of publication, Samuel O’Brient 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.