Cast your mind back to the mists of October. Donald Trump had a killer day on the New York Stock Exchange when his social media SPAC quadruped in price without showing a dollar in cash flow. If you didn’t read about this then, you owe it to yourself. This is financial gymnastics at the Olympian scale. There was never a workable business plan for Truth Social, but then again, that was never the point. The point was to sell stock in it and make money. And that occurred when the stock flew from $9.96 to $45.50. At that point Trump was trying to raise $293 Million. Now he’s trying to raise $1 Billion. CNBC:
There have been no official announcements of a beta launch, nor have there been any sightings or images of an operational platform online.
At the same time, the price of the stock of Digital World Acquisition Corp. – the SPAC company that plans to merge with Trump’s social media firm – has dropped dramatically since its share price exploded when the deal was announced in late October.
Shares of DWAC, which had been trading as high as $175 per share right after the merger was disclosed, were trading at around $44 per share on Wednesday.
Late Wednesday afternoon, Reuters reported that Trump’s new company is trying to raise up to $1 billion by selling shares to hedge funds and family offices at a price higher than its initial pre-merger valuation of $10 a share.
“Trump Media is now looking to secure a so-called private investment in public equity (PIPE) that would value Digital World shares closer to their recent price, currently hovering around $40,” Reuters reported, citing anonymous sources.
The value of DWAC shares spiked during the final 10 minutes of trading Wednesday, jumping from $38.35 at 3:50 PM to a high of $51.02 just after 4:00 PM.
Maybe he’ll do it, raise the billion, although $51.02 a share is certainly not the same as $175.00. This is one of those cat and mouse games you see with savvy investors from time to time. The prescient ones know when to get out and everybody else loses their shirts. Timing and money smarts are the issue, as opposed to plans to actually invest in a real world company with flesh and blood people doing things.
And as for the people who are looking for something more than a shell game to get lucky with, such as an actual functioning platform upon which social media functions take place, that is still nowhere in sight. That’s out there on the horizon somewhere, like Moby Dick.