Stocks soar on news that Trump will start a social media company. In an announcement on Wednesday, the Trump Media and Technology Group and Digital World Acquisition Corp. (DWAC), a Special Purpose Acquisition Vehicle (SPAC), announced their merger to create TRUTH Social, a social media app.
Private companies can take their stock public through SPACs. During the day, DWAC share value rose to a high of $52, closing up more than 350% on Thursday after rising more than 400% earlier in the day.
Stock prices of the little-known speculative company surged after it announced the day before that it would merge with former President Trump’s social media company, Trump Media and Technology Group (TMTG).
AP reported that investors are betting without delay. The former president announced that he would take on Twitter and Facebook, which banned him.
While experts differed on whether he would be successful in launching a media group, the stock market responded unexpectedly.
Trump said: “Your favorite American president has been silenced in a world where Twitter is always present.”
As the New York Times reported, “Conservative voices are welcome on social media,”. “Half of the top 10 Facebook accounts are conservative media, politicians, and commentators”.
With the launch of TRUE Social next month, Trump Media and Technology Group announced plans to expand across the U.S. early next year and to launch TMTG+, a video-on-demand (VOD) service.
Ali Mogarabi, a Morningstar stock analyst focused on social media, predicted that TMTG could find success as a competing platform to existing giants like Facebook.
It’s unclear how long this will last, he said. “U.S. midterm elections next year will reveal whether this is a success or failure.”
Trump’s company plans to launch a beta version next month and a full version in the first quarter of 2022.