Digital World Acquisition Corp. (NASDAQ:DWAC) is facing turbulence today as it continues battling market forces. The special purpose acquisition company (SPAC) has seen a slight bump recently since former President Donald Trump began using Truth Social. Unfortunately for Trump Media & Technology Group (TMTG), it hasn’t been enough to keep DWAC stock in the green. This week has brought further positive updates, but shares are still failing to gain any real momentum.
What’s Happening With DWAC Stock
DWAC stock began today on a high note. Yesterday, Reuters reported that Truth Social will finally be accessible via a web browser by the end of May. Since the platform’s launch in February 2022, it has only been available as a mobile application. Furthermore, it has not been optimized for Android users. In addition to the web browser update, TMTG has offered to provide investor relations updates via email alerts.
Despite rising early this morning, DWAC stock quickly reversed direction. As of this writing, it is down 3.36% for the day and doesn’t look poised to pull back into the green.
Why It Matters
Until Trump’s return to Truth Social last week, DWAC stock had spent almost two months seeing nothing but bad news. From app downloads plunging by more than 93% to multiple high-level executives quitting, everything seemed to be going wrong. Now, the company’s race to the bottom may have slowed, but DWAC is not picking up enough momentum to be an advisable play. The stock has still lost more than 26% of its value over the past six months, and now it is up against a powerful new competitor. Under Elon Musk, Twitter (NYSE:TWTR) is likely to deliver everything Truth Social has failed to provide for users.
Today’s news isn’t likely to help DWAC stock make up any ground. For a start, lack of accessibility via web browsers isn’t one of Truth Social’s bigger problems. As of last year, smartphone and tablet apps accounted for more than 70% of the U.S. digital traffic. That number isn’t likely to decrease as Musk’s Twitter takeover ushers in a new wave of social media users. Additionally, the revamping of Twitter as a more free-speech-centric platform promises to pull more users away from Truth Social, thereby compromising the company’s utility even further. And while the new focus on investor relations is better for the company, that doesn’t mean it will boost share prices.
Even when Truth Social sees good news, as it has today, it doesn’t address the company’s real problems. As a result, DWAC stock can rise quickly but never stays there. Investor confidence is low, and TMTG still hasn’t provided any real evidence that it can demonstrate a turnaround.
What It Means for DWAC Stock
In the weeks when Truth Social was experiencing nothing but bad news, investors wondered what some good news would bring. Now the answer is clear — not enough for it to matter. The return of Trump to the platform may have helped it rise in popularity, but it hasn’t generated any sustainable growth for DWAC stock. Twitter was already providing more for users than Truth Social, and when Musk takes the helm of the company, it will be even more appealing to conservative thinkers.
No matter how we look at this, Truth Social has no path forward, even on its best days. Investors should still avoid DWAC stock and focus on social media companies with demonstrated utility.
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.
