Trump SPAC continues rally, up as much as 1,100 percent since dealby Will Feuer Social Links for Will Feuer View Author Archive Get author RSS feed · New York Post
Shares of the Trump-linked special purpose acquisition company, or SPAC, Digital World Acquisition Corp. continued to rally Friday, jumping another nearly 250 percent in morning trading.
The stock has soared as much as 1,137 percent since its Thursday opening price of $12.73 per share.
Trading of the stock was halted at $131.90 per share, up almost 190 percent from its opening price on Friday, less than a minute after the markets opened.
Shortly after 10 a.m. ET, the stock was halted again at $157.50, up more than 240 percent since the opening bell. At 10:06 a.m., it was halted yet again after falling rapidly to $144 per share, still up more than 210 percent since the markets opened.
The stock ended the day Friday up almost 122 percent at $108.84.
Warrants tied to the SPAC have also soared in value, up more than 2,000 percent since the announcement. The warrants, which trade under the ticker DWACW, are contracts given to early investors that give the holder the right to purchase additional shares in the future at a certain price.
The SPAC, a so-called blank-check company that’s formed and goes public to raise money from investors to fund an acquisition of a private company, which will then take its place on the markets, announced Wednesday evening that it plans to merge with former President Donald Trump’s new social media company.
The surge that began Thursday morning appeared to be driven by amateur traders as the Reddit crowd that sparked the frenzy in GameStop stock earlier this year apparently piled in.
DWAC was the most-traded stock on Fidelity’s platform on Thursday, with well over 30,000 buy orders earlier in the day, outnumbering the sell orders by 3 to 1.
The stock saw more than three times the buy interest Thursday of Tesla, the second-most-bought stock on Fidelity, and over six times the demand for the ProShares Bitcoin Strategy ETF.
DWAC was also the most-mentioned company on the popular amateur trading chatroom Stocktwits on Thursday, and it was mentioned widely on Reddit’s WallStreetBets forum, rivaling even the likes of GameStop and AMC over the past 12 hours for the most mentions.
Along with keen interest from amateurs, DWAC also has backing from major Wall Street names, according to financial disclosures.
After the blank-check company’s IPO — but prior to the announced deal with Trump — major hedge funds including DE Shaw, Highbridge Capital Management, Lighthouse Partners and Saba Capital Management have reported owning major stakes in the SPAC.
A spokesperson for Lighthouse told The Post that the firm has sold all of its unrestricted shares in DWAC, but declined to comment on when it sold or how much profit it saw.
“Lighthouse was not aware of the pending merger and no longer holds unrestricted shares of the SPAC,” a spokesperson said.
It’s unclear if others have sold their shares. Highbridge declined to comment. The others did not immediately return The Post’s request for comment.
Trump’s newly formed company, Trump Media & Technology Group, announced Wednesday evening that it plans to merge with DWAC and take its place on the public markets.
TMTG said it will roll out a new social network, dubbed TRUTH Social, which is set to launch in beta for “invited guests” next month and come online nationwide in the first three months of 2022.
Its mission is to “create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America,” it said.
The merger deal would value TMTG “at an initial enterprise value of $875 Million, with a potential additional earnout of $825 Million in additional shares (at the valuation they are granted) for a cumulative valuation of up to $1.7 Billion depending on the performance of the stock price post-business combination,” according to the Wednesday press release.
“Trump Media & Technology Group’s growth plans initially will be funded by DWAC’s cash in trust of $293 Million (assuming no redemptions),” according to the release.
TMTG has not yet named any management officers or employees.
Patrick Orlando, CEO of DWAC, hailed TMTG as “one of the most promising business combination partners to fulfill that purpose.”
“Given the total addressable market and President Trump’s large following, we believe the TMTG opportunity has the potential to create significant shareholder value,” he added.
Orlando is a former employee of investment banks, including Deutsche Bank, where he specialized in emerging markets fixed-income derivatives.
He is currently associated with at least three other SPACs: Yunhong International, Benessere Capital Acquisition, and Maquia Capital Acquisition. None of them have successfully gone public.
One of his SPACs, Yunhong International, is incorporated in the Cayman Islands, a popular tax haven, and its headquarters is listed as Wuhan, China, the original epicenter of the COVID-19 pandemic.
In May, Yuhong International said it reached a deal to take Giga Energy, a Chinese green energy company, public, but it later fell apart.
The chief financial officer of DWAC is Luis Orleans-Braganza, a member of Brazil’s National Congress and a supporter of the country’s far-right president, Jair Bolsonaro.
Orleans-Braganza is also a member of Brazil’s defunct royal family.