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DWAC stock dives over SPAC merger concerns with the Trump-tied Truth Social

Yahoo Finance anchors discuss the stock performance for Digital World Acquisition.

Video Transcript

- My play is DWAC. That's Digital World Acquisition Corporation. The blank check acquisition firm that agreed to merge with Donald Trump's social media company, failed to secure enough shareholder support for a one year extension to complete that deal. At stake, as you probably know by now, is former President Trump's social media startup Truth Social. And specifically a $1.3 billion cash infusion that Trump Media Technology Group stands to receive from DWAC.

The SPAC that linked deal inked a deal rather last October to take TMTG public, Digital World has said it believes TMTG will have sufficient funds until April of 2023. Not so long. TMTG said last week that Truth Social is on strong financial footing. Would begin running advertisements soon. Shares are down 60% this year. Pummeled today about 17%.

And Rochelle, we always have to remind ourselves, Twitter, as influential as it's become, is still having massive troubles over the years making money. It is not as easy as the former President wanted it to be. And I think a lot of people are not surprised to see this platform really struggle out of the gate. And quite frankly, may never come to fruition.

- I mean, SPACs are already having a tough year. And I know that DWAC, you have a lot of individual investors as opposed to some of these bigger institutional investors. So they're having to adjourn their meeting on this, and really delaying this merger as they really try and get the pieces together. But it's a tough space as we've already been talking about in the social media space. So we'll keep an eye on it. But not going well so far to say the least.

- Certainly. As shares under a tremendous amount of pressure today. The lowest level that we've seen since the deal was announced back in October. Trading volume more than 10 times what we typically see on the stock. So shares off 16%. I don't think this is the last we've heard of this. But it's going to be interesting to see how all this plays out.