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Trading in Trump-linked SPAC Halted Many Times as Stock Soars 194%

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By Dhirendra Tripathi

Investing.com – Trading in Digital World Acquisition stock (NASDAQ:DWAC) was halted several times Thursday while the stock soared 194% after the news of the SPAC’s merger with former U.S. President Donald Trump’s planned social media platform sent traders into a buying frenzy.

More than 323 million shares of the company had exchanged hands on the Nasdaq as of 1:05 PM ET.

A SPAC, or special purpose acquisition company, is a blank-check company that uses proceeds from an IPO to take private firms public. It is usually set up by high profile people with relevant industry experience and that’s what gets it the initial valuation with the subsequent transaction bringing it the final value.

DWAC was the most actively traded stock as of midday Thursday among NYSE and Nasdaq listings.

In a sign that it has the backing of the retail traders active on social media, the stock featured among the top 10 most popular names on Reddit’s WallStreetBets, whose members were behind the meteoric rise of meme stocks like GameStop (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC).

Trump Media & Technology Group announced the combination Wednesday. Trump also said he would roll out the platform ‘TRUTH Social,’ that he claims will “stand up to the tyranny of big tech.”

The press release announcing the deal said the Trump company will have “at an initial enterprise value of $875 million."

DWAC was incorporated late last year, soon after Trump lost his re-election bid.

Its CEO, Patrick Orlando, is also the CEO of Yunhong International, according to regulatory filings. Yunhong lists Wuhan, China, as its headquarters, the city the coronavirus originated from and a place Trump often associated with the virus.

The SPAC's chief financial officer Luis Orleans-Braganza, is a member of Brazil’s parliament, according to a regulatory filing.

Trump has been off social media as both Facebook (NASDAQ:FB) and his then favorite, Twitter (NYSE:TWTR), banned him from their platforms for his alleged role in inciting the January 6 Capitol riot. Since then, Trump has been exploring ways to restore his once-sizable social media presence.

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