Throughout 2021, "meme investing" - a gamified version of “investing” that combines herd mentality with social media and brokerage accounts to send select stock prices to the moon - has defied analyst logic and, at times, has captivated the attention of us all.
The most recent stonk that could comes courtesy of none other than former President - and current Twitter outlaw - Donald J. Trump via Digital World Acquisition Corp (DWAC) proposed combination with Trump Media & Technology Group.
Trump Media & Technology Group doesn’t currently have a product but does have lofty plans to rival Twitter and Facebook-parent Meta with a social media platform called “Truth Social”, as well as plans to take on Netflix, iHeartRadio, CNN, and Disney+ with a TMTG+ and TMTG News.
In addition to coming after the social media platforms that banned him, and the news platforms that opposed him, TMTG also wants to take on the companies that banned conservative “free speech” social media platform Parler by expanding into web services and rivaling AWS, Google Cloud, Azure, and payment platform Stripe.
The DWAC SPAC, as it is, looks like a meme stock on the decline - currently at about $57 a share - that has traded in the humble range from $9.84 and $175 since the SPAC’s September 30 IPO.
While the SPAC may be on the decline, it may be just the beginning of this meme stock’s career in the spotlight, at least according to Jaime Rogozinski, the founder of the WallStreetBets community on Reddit, during a November 1 interview with Stansberry Research.
In reference to the DWAC SPAC, Rogozinski said that he believes it is “clear” that “this one is next” and that he thinks “it’s going to be a while before they move on to the next one.”
Rogozinski defended this by saying that there is “inherent demand” for “this thing”, but I’d argue that its less inherent demand for a social media platform that allows true free speech - including hate speech - and alternative facts/rampant misinformation, and that it's more about people wanting investment in the meme that was Trump’s Twitter feed. Or that meme investors just saw it fitting that a Trump-associated media stock was a stonk. Either way, this seems like a meme more than an investment.
Parler, which had been wildly popular, has had a near-impossible time getting back in the swing of things ever since it was removed from the Apple App Store, Google App store, and offloaded from AWS as demand for a true “free speech” social media platform appears to have remained lower since the January 6 insurrection.
In the few weeks following its re-release on the Apple App store, Parler recovered just under 4% of its users, with two-thirds of the downloads occurring in the first five days. Which makes the “inherent demand for this thing” argument feel a little less material than Rogozinski claims.
But while the demand for the product itself may be up in the air, that doesn’t take away from its likelihood to stick around longer than, perhaps, GameStop, AMC, or some of the other meme stocks that have either skyrocketed or plummeted because there definitely appears to be demand for more Trumpisms.
So what’s next for the DWAC SPAC?
Well, that’s anyone’s guess. I would bet that it is fading for now but that it will be back in fashion, eventually, when 1) the SPAC officially combines with Trump Media & Technology Group and 2) there is either a product release or some other - potentially exciting - announcement from either the company, or Trump personally.
When searching the WallStreetBets forum on Reddit for the ticker DWAC, you find that it hasn’t actually been posted about for several days, so I wouldn’t rush into a position - though potential catalysts are on the horizon.
In the TMTG combination announcement, Trump Media said that it expects to launch its Beta to invited guests sometime in November 2021, with the company expecting a full roll-out come the first quarter of 2022.
Further, DWAC holders still have to ratify the business combination in order for the merger to go through.
All of these moments are both foreseeable and seem capable of reviving the SPAC into the volatile fun that it was a couple of weeks ago. So if you are feeling extra risky and missed the first pop, there just might be some gas in the tank ready to blow, when the time is right.
