Trump SPAC Reignites Meme Talk, ETF Issuer Says
Special purpose acquisition company investing got more interesting with the merger of Donald Trump’s social media platform Truth Social on Friday, whetting the appetite of at least one ETF issuer.
“I think this will be the mother of all meme stocks,” said Matthew Tuttle, founder of Tuttle Capital Management in Greenwich, Connecticut. Among Tuttle’s ETFs is the SPAC and New Issue ETF (SPCX), which is designed to capture some of the tight spreads as the SPACs invest the underlying asset pools.
The merger of the SPAC known as Digital World Acquisition Corp. with the former president's social media platform Truth Social may bring in Trump supporters as investors and help the presumptive Republican presidential nominee raise money as he seeks to finance a $454 million civil judgement against him.
Shares of Digital World surged 27% today, according to Bloomberg after the newly merged company said it will begin trading Tuesday under the the DJT ticker. The news site estimated Trump, with a 60% ownership stake, is in line for a roughly $4 billion windfall.
SPACs are essentially a pool of investor cash used to take companies public. Truth Social operates under the parent company name of Trump Media & Technology Group with the ticker symbol DJT.
Donald Trump Cashes In With DJT Stock
SPCX is designed to capture some of the tight spreads as the SPACs invest the underlying asset pools. Tuttle said he didn’t own shares of the SPAC that merged with Truth Social, but that he is buying shares in the merged company in his personal account.
“I struggle to see the value of Truth Social if it’s purely trading on fundamentals,” he said.
However, Tuttle sees potential price swings as investors jump on board to potentially support Trump’s financial woes.
“This could become a shiny object, and I would not be surprised to see some district attorney somewhere trying to figure out some way to go after this money,” Tuttle said.
Even though the windfall from the merger is not immediately available to Trump, the fungible nature of money could be a big step toward helping Trump cover the civil judgement.
“This has the potential to be a GameStop,” Tuttle said in reference to the meme stock craze from three years ago when individual investors drove GameStop shares up more than 1,600% in a matter of weeks before the share price came crashing back down.
“I would not be buying this long term, but I’m going to trade in and out of it,” Tuttle said.
