What happened
Shares of Digital World Acquisition (DWAC) are up 46.7% in midday trading on Monday and continue to hit new highs. The special purpose acquisition company (SPAC) delayed a vote on merging with former President Donald Trump's Truth Social just last week, but that hasn't deterred traders today.
So what
Today's move is driven entirely by expectations that Trump would seek another term in 2024, which could be announced soon after tomorrow's election. This doesn't fundamentally change the value of Truth Social, change its technical problems, or grow its user base, but that apparently doesn't matter to speculators today.
What's more notable is the fact that shareholders can't seem to agree on even merging with Truth Social. Digital World Acquisition CEO Patrick Orlando delayed a vote on the deal until Nov. 22, because there wasn't support for merging with the company.
Now what
Today's move is nothing more than speculation, but that could be said for Digital World Acquisition's price movement since the Truth Social deal was announced. The Truth Social platform hasn't performed particularly well to date, with technical issues and only about 2 million users on the app.
This is not a stock I'm interested in buying today. The merger may not actually go through, Truth Social may never be profitable, and I have no idea what the social media network will be worth even if it is successful. Speculation alone isn't a great reason to buy a stock, no matter the market conditions.
