Trump SPAC DWAC price dropped after huge success in social media news

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The social media app will be developed by Trump Media and Technology Group (TMTG).

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Phunware, which is involved in Trump’s 2020 reelection campaign, saw a 470% surge in price on Friday.

There is no indication that DWAC and Phunware have a business relationship. But the rise of Phunware last week coincided with the rise of SPAC stock.

Short-seller Iceberg Research announced a bearish position on DWAC on Monday, saying investors are faced with uncertainty over this blank-check deal because Trump could become the dominant shareholder after the merger.

“Now that the initial turmoil has passed, we only see risks for investors in the near future. Based on Trump’s track record, at the current price, the renegotiation is likely to keep more of the joint company for him, ”Iceberg Research said in a tweet.

“The SPAC holders don’t yet own a piece of this project. Trump has the leverage, they don’t.”

DWAC remains a popular chatroom topic among retail traders, who were credited last week for making SPAC the latest hot stock “meme” in 2021.

The DWAC ticker was the second most popular name in Reddit’s WallStreetBets chatroom on Monday, after Tesla, the electric-vehicle giant that reached $ 1 trillion market capitalization on the same day, according to alternative data provider Quiver Quantitative.

A trending post on WallStreetBets on Monday said “DWAC- ALL IN,” which garnered more than 500 comments.

SPACs, also known as blank-checking companies, were created to raise investment in the public equities market, with the goal of using the cash to buy or merge with private companies.

Trump’s new social media company, Trump Media & Technology Group, on Wednesday said it and DWAC had reached an agreement to merge so that the former president’s company would become a publicly listed company.

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