What happened

Shares of the shell company Digital World Acquisition Corp. (DWAC 6.43%) traded nearly 11.5% higher as of 10:55 a.m. ET today after Elon Musk said he would end his bid to buy Twitter (TWTR).

DWAC is a special purpose acquisition company (SPAC) that is attempting to merge with and take public Trump Media & Technology Group (TMTG), the parent company of Truth Social, an alternative social media platform.

So what

When DWAC announced that it would be merging with TMTG, shares soared on the belief that an alternative social media platform backed by former President Donald Trump and his huge following could potentially challenge mainstream social media.

There have been many aspects that have slowed down some of the stock's momentum. But one in particular came when Musk announced his intent to purchase Twitter, a move many believed would change some of the policies on the platform, including many that likely alienated Trump's followers.

I think the market thought that a Twitter led by Musk would be less restrictive on certain types of speech, which could hurt some of Truth Social's momentum. Musk had also said he would be willing to let Trump back on Twitter.

Now what

While the developments between Musk and Twitter have clearly moved DWAC, I am more concerned about the stock for other reasons.

The SPAC is under investigation by the Securities and Exchange Commission and the Department of Justice, and the Southern District of New York has subpoenaed members of DWAC's board of directors.

There have also been tech issues, the departure of high-level executives, and the fact that the company is seemingly behind on user projections this year, which make me weary of this stock.