DWAC stock closed down at $17.10-0.95 at close: October 04:00 PM EDT
Tuesday saw a 5% decline in the value of Trump SPAC Digital World Acquisition (NASDAQ:DWAC) on news that Tesla CEO and billionaire Elon Musk had suggested finishing his delayed deal with Twitter (NYSE:TWTR), the major rival of DWAC target Truth Social.
DWAC, which plans to IPO former president Donald Trump’s social media platform and app Truth Social, dropped 5.3% in response to the news, ending the day at $17.10.
Twitter (NYSE:TWTR) increased by almost 22% as a result of the news that Musk had written to the company’s management offering to move forward with his postponed $44B purchase deal at the previously agreed-upon price of $54.20 per share.
Some investors think that a Twitter run by Musk may allow Trump to return to the Twitter social media network, which is why Digital World (DWAC) plummeted. Trump is promoting Truth Social as a substitute for the social media juggernauts Twitter (NYSE:TWTR), Facebook (NASDAQ:META), and Google (NASDAQ:GOOGL), from which he has been barred.
Some DWAC investors worry that a Twitter operated by Musk, who has claimed that his bid for TWTR is actually about free expression, will become more competitive.
Investors are also likely to consider the potential that Trump, who had nearly 80 million followers on Twitter before his suspension, would rejoin the service if Musk permits the former president to do so. Trump declared in April that he wouldn’t use Twitter (NYSE:TWTR) again, even if Musk had his account restored.
DWAC stock outlook
If Musk is successful in acquiring control of the social media network with his $44 billion acquisition, as he previously promised, he will lift Trump’s prohibition. DWAC stock has fallen 82% after reaching a high of $97 in early March. The price has dropped as investors worry about a Musk-led Twitter and a number of regulatory investigations. Most recently, the stock fell when DWAC’s bid to go public was postponed because the SPAC lacked sufficient shareholder support to pass a deal. Holders will now vote on the agreement on Monday.
A termination letter from a PIPE investor representing $138.5 million of the $1 billion PIPE investment revealed in December was received by DWAC last month, according to information released by the company.
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