You would forgiven if you wondered how quickly you could short the stock after hearing that former US President Donald Trump had dreamt of a media and technology firm and intended to take it public via a blank-check company. Choose a reason: Right-leaning social networks had largely failed; the company appeared to be chronically underfunded, given the scale of its aims and the wealth of its competitors; and there was no product to use, let alone previous income to forecast. There are additional reasons for skepticism but those the ones that I find most compelling. Nonetheless, the news boosted the stock of the SPAC in question, Digital World Acquisition Corp. In addition, it is doing it again this morning:
Remember that DWAC is the ticker symbol for Digital World Acquisition Corp’s Class A stock, whereas DWACU is the same stock with half a warrant attached. The latter stocks have raised less, which is unusual. Regardless, according to Yahoo Finance, DWAC currently has a market capitalization of roughly $4.7 billion. That means Digital World — also known as Trump Media and Technology Group (TMTG) — is the newest unicorn to emerge from the world of media and technology. Sure, it is a public price, but the business that will merge with Digital World is so young that calling it a startup is ridiculous.
All of this is illogical. This is all foolish, even by the standards of 2021 and the SPAC period. We’d like to appreciate the company’s presentation for reminding us that podcasts are growing in popularity, a truly mind-bending insight — Trump’s name is the only thing that distinguishes TMTG from other hot air tied to tissue-thin market figures. Remember that TMTG plans to support its operations with SPAC money rather than Trump cash; it does not even have the financial backing of the man whose name is on the company’s logo. You know the ostensibly multibillionaire.
The fact that the company is so ridiculous should have alerted us to the possibility of it becoming a mere stock or stonk. Why, because it appears that, only the most bizarre businesses make the cut. Is physical retail dwindling in the face of increasing internet distribution of gaming goods? Let us launch GameStop into space. Is it true that no one rents cars? Let us all put our money into Hertz stock.
Therefore, practically by definition, DWAC is moving vertically. What is the harm? This stock’s ascent is both funny and a sobering critique of efficient market theory. Nothing makes a stonk more meme-worthy than the fact that it makes no sense as a business. As a result, TMTG is up a kajillion percent, which makes sense exactly because it makes so little sense. Normally, at this point, I would just go to bed, but I have a lot of work to do, so we will leave it here for now.