Social media stocks have been buzzing since Musk’s decision to buy out Twitter (NYSE: TWTR). Many investors are now hopeful that the platform could make a comeback, especially with Musk’s new policy plans for the platform. One particular social media stock that surged on Wednesday was the Trump SPAC Digital World Acquisition Corp (NASDAQ: DWAC). Shares jumped over 24% at one point after Elon Musk tweeted that Trump’s budding social media platform, Truth media, topped the charts on the Apple app store.
Elon Musk tweeted on Wednesday that Trump’s social media app had beaten even Twitter when it came to daily downloads on the Apple Store. Truth Social was the top free app downloaded, above Twitter, which was number two, and TikTok, which was number 5. Despite new management, Trump stated that he wouldn’t be returning to Twitter even if Musk personally invited him back in. However, a lot of people expect him to retract those words in the near future.
Prior to this, Trump’s social media company had fallen substantially this past week. Shares had retreated over 40%, mainly as some figured Twitter could see a resurgence under Musk’s new policies, including the removal of bots and encouraging more free speech. Prior to this jump, shares had plummeted over 25% ever since Musk announced he had taken a stake in Twitter.
However, shares have since staged a small comeback starting on Tuesday. Despite this small rally, some experts had warned that Musk’s Twitter could prove to be the deathblow for the Trump SPAC and its young media operation.
“DWAC is dead in the water at this point. I’m not trying to make a political point there, I’m just stating a fact,” said Empire Financial Research’s Enrique Abeyta. “Musk’s acquisition of Twitter is a mild negative, but there were so many negatives already that you can’t really even describe it as a game-changer,” he added, speculating that “If Musk allows him back on Twitter, he’ll go back to Twitter – which is clearly not a positive for DWAC.”
Shares of DWAC were up as much as 24% on Wednesday, although those gains settled closer to 10% by the time Wednesday was over. In contrast, Twitter has tumbled 2.1%, with shares steadily declining since April 26th.
Prior to this, Kerrisdale Capital released a short report targeting DWAC last week. The news caused the SPAC to plummet by 9%. Both DWAC and Truth Media were referred to as being a pair of sketchy companies with a disastrous launch that is going to collapse sooner or later.
The relative lack of details regarding both companies has aggravated many investors, especially those who had hopes that the former President’s platform would have had more success by now.
Twitter Company Profile
Twitter is an open distribution platform for and a conversational platform around short-form text (a maximum of 140 characters), image, and video content. Its users can create different social networks based on their interests, thereby creating an interest graph. Many prominent celebrities and public figures have Twitter accounts. Twitter generates revenue from advertising (90%) and licensing the user data that it compiles (10%). – Warrior Trading News