Merging company

DWAC stock is the meme stock phenomenon that no one saw coming

The phenomenon of memes stocks shows no signs of slowing down. Although we have been there for several months, Reddit continues to have a major impact on the markets. The last example is Acquisition of the digital world (NASDAQ:DWAC), an ad hoc acquisition company (SPAC) merging with Trump Media & Technology Group (TMTG). DWAC stock rose significantly after the merger was announced. However, things have started to calm down recently.

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Those familiar with the PSPC cycle at this point know that this is normal for the course. When a major deal is announced, there is a tremendous upsurge. Then there are several key short-term catalysts that day traders can tap into for short-term gains. You usually see a huge crash once the deal is on the books. Therefore, with the stock falling substantially over the past month, now is the time to take advantage of any development to come.

Considering these factors, treating the stock as a short-term trade versus a long-term investment makes sense. Let’s look at some of the other factors at play here as well.

DWAC Stock is a SPAC bet

The biggest problem is knowing what the future holds for the company. DWAC is targeting many speculators looking to turn former President Donald Trump’s social media power into financial success. The Trump Media and Technology Group, also known as T Media Tech, is expected to have nearly $ 300 million in the capital once the SPAC merger has been completed. They plan to use this money for their business. But we have no idea what the future holds for this business.

Starting a new social media network is no small task. It requires technical knowledge and execution skills to be successful, and it comes with many risks that cannot necessarily be predicted or predicted.

DWAC and TMTG have fierce competition

With the imminent merger between DWAC and TMTG, Trump’s new social network, Truth Social, is getting closer to reality. This company has huge digital media ambitions and is looking to tackle multiple fronts at once.

TMTG is making plans to compete with some of the biggest names in media, including CNN and iHeartMedia (NASDAQ:IHRT). The company will launch a streaming service called TMG + and an Internet TV channel that offers original programming not available on any other platform, all aimed at removing from by netflix (NASDAQ:NFLX) domination. They also have their tech stack, which directly competes with Amazon (NASDAQ:AMZN) and their Amazon Web Services (AWS), the alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud Platform and that of Microsoft (NASDAQ:MSFT) Azure blue.

Entering only the social media market can be difficult. You need to develop a clear plan and invest heavily for your business idea to be successful. And all of the markets targeted by T Media Tech are highly competitive. Initial public offerings (IPOs) are often keen to emphasize the size of their investor base, which is why it is not unusual for them to include significant total addressable market (TAM) figures in their S files. -1. Investors can expect this company to have plans for making money in these markets and what resources are needed.

Truth Social could challenge traditional platforms

The Truth social media platform has a good chance of becoming an overnight success, not only for former President Donald Trump, but also for investors considering DWAC. That’s because it gets so much attention, and that’s what everyone wants these days: your time. After the January 6 riot at the Capitol, his social media accounts have been banned. At that time, it was followed by almost 150 million people across multiple platforms. When building your next social network, it’s important to know how many people will be using the product.

This is why these numbers are important. The former president may be a polarizing figure in America, but he is still extremely popular with his supporters.

Earlier this year, the former president’s subscriber base was barred from accessing his social media accounts, creating a void that Trump is all too keen to fill with his own network. Other catalysts include political campaigns and elections in 2022 or 2024, which increase the demand for comment on current events, which will help an alternative platform seeking to gain traction. Therefore, all of this will have an impact on DWAC’s inventory in the run-up to the completion of the merger.

Treat DWAC stocks as short-term trade

Launching a new social media network is not for the faint of heart. There are several examples of social media companies that have failed. Truth Social can become a powerful social media platform with its innovative features and dedicated followers. If all goes well, Trump’s network could exceed expectations and grow faster than expected.

It can also go south quickly, given the elements you’re facing here. Therefore, the future is vague for this one.

Truth Social appears to be TMTG’s key product, as evidenced by its prominent positioning in their presentation to investors. Several social media companies have emerged after Trump’s ban. They wanted to offer an alternative to Meta (NASDAQ:FB) and Twitter (NYSE:TWTR). However, most of them sunk very quickly – so it remains to be seen what will happen with the new platform.

At this point, perhaps the best way to look at DWAC stocks is with a short-term investment.

At the date of publication, Faizan Farooque did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication guidelines.

Faizan Farooque is a contributing author of InvestorPlace.com and many other financial sites. Faizan has several years of stock market analysis experience and was a former data reporter at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions about their portfolio.


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