This is a meme stock where the price is not based on anything financial results or reality.
https://invezz.com/news/2024/03/20/digital-world-dwac-is-it-safe-to-buy-trump-spac-stock/
DWAC has made several headlines in the past few months. Three weeks ago, co-founders of the SPAC sued Trump Media, alleging a stock grab. This happened a few weeks after the SEC allowed the two companies to go through a merger. Another important report was that Trump had approached Elon Musk to buy Truth Social.
DWAC stock has done well this year as Donald Trump has become the Republican nominee for US president. The expectation is that the election hype will lead to more users to the platform since it is now his main mouthpiece.
Also, there are hopes that a Trump victory in the election will see more advertisers flocking to the platform. For example, it has been widely reported that many foreign governments and lobbyists frequented Trump’s Washington hotel during his term.
Fundamentally, however, Trump Media is a significantly weak social media company. First, the biggest risk is that it has struggled to add users, especially now that X (Twitter) has eased its content moderation policies. ....
Further, and most importantly, Truth Social will struggle to attract the biggest advertisers like Apple, Unilever, Colgate-Palmolive, and General Motors. Most of these firms have generally avoided advertising in right-wing platforms, including Fox.
This means that Truth Social will focus on smaller advertisers like My Pillow that have a limited marketing budget. Also, it will take a longer period for the company to break even.
Meanwhile, Trump is on the hook for millions of dollars. This week, he said that he could not post the bond to a recent New York filing. This means that Trump will be one of the top sellers of the stock when the lock-up period arrives.
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