What happened
Shares of special purpose acquisition company (SPAC) Digital World Acquisition Corp. (DWAC) dropped as much as 15.1% in trading on Tuesday as its acquisition target, Truth Social, faces challenges. Shares recovered some losses as the day went on but are still down 6.6% at 1:30 p.m. ET.
So what
The Truth Social app was launched late in February in beta form but has run into hiccups and low engagement, according to users. Even President Trump, who started the company, hadn't posted as of a few days ago, according to Axios.
Image source: Getty Images.
Digital World Acquisition Corp. has jumped more than eight times on speculation that Trump would build a social media giant, but the early days of the platform haven't been impressive. And if the project continues to flounder, it's possible a deal doesn't come together at all.
Now what
There are currently more questions than answers when it comes to Truth Social and Digital World Acquisition Corp. The company is getting a high market value based on the hope that President Trump will be able to build a new social network, which he's never done before. As Truth Social's launch flounders, this is a stock investors seem to be slowly giving up on, at least for today.
