Shares in Digital World Acquisition (NASDAQ:DWAC) stock jumped 25% over the weekend on hopes that former President Donald Trump will run for president again in 2024.
DWAC is trying to acquire Trump Media and Technology Group and its Truth Social, a social network Trump formed after his removal from Twitter in early 2021. A meeting to extend DWAC’s deadline for completing the merger is set for Nov. 22.
There are reports that new owner Elon Musk will offer Trump the chance to post on Twitter. So far, Trump has indicated that he would decline the offer, choosing to stick with his own Truth Social platform exclusively.
What’s Going on With DWAC Stock Today?
Shares in other companies linked to the former president, like Rumble (NASDAQ:RUM) and Phunware (NASDAQ:PHUN), also rose this morning.
Trump reportedly wanted to announce a presidential bid during a weekend rally for Pennsylvania gubernatorial candidate Doug Mastriano and Senate candidate Mehmet Oz, whom he endorsed before their primaries. He is now expected to announce his run on Nov. 14.
Pundits predict a Republican sweep of the Nov. 8 midterms. Analysts call it too close to call.
The problem for DWAC stock is that it has been unable to gain the quorum of shareholders necessary to consummate the merger. The plan needs 65% shareholder support. An attempt to call the meeting on Nov. 3 was the sixth unsuccessful effort. Many DWAC shares are held by small retail investors who can be difficult to reach.
The delays in finishing the merger have caused some private investment in public equity (PIPE) investors to pull out. The company is also subject to a criminal probe over discussions before the merger announcement. A former Trump Media executive, Will Wilkerson, has turned whistleblower in the probe.
What Happens Next?
If the DWAC merger doesn’t go through, Trump Media could still find a merger partner in Rumble or Phunware. It could also remain privately held. But if that happens, DWAC will be liquidated and pay investors back just $10 per share.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
