On Wednesday, former President Donald Trump announced the Trump Media and Technology Group will merge with a special purpose acquisition company – Digital Acquisition. This merger will allow Trump to collect $290 million in cash to create competing social platforms against Twitter, Facebook, and other big social media platforms.
As soon as the merger was announced, on Thursday SPAC saw a 350% hike in its stocks. Although the lack of information about the merger to the investors made many experts skeptical about it, the hike in the prices also proves that on one hand where many are questioning the prospects of the company, many are trusting the potential of the merger as well.
According to the threads posted on the WallStreetBets forum on Reddit, a platform where investors share their failures and success in the stock market, many of the users bragged about how their bought and sold technique of Digital Acquisition Corp stocks made them hefty profits. On which some of the users were deciding whether they must also take the chance or not.
Digital Acquisition Corp is a SPAC, also called a blank cheque company. In its initial public offering, it made $300 million solely before it went on to find a private company to merge with.
Merger with SPACS for a private company would mean ease to get the private company’s stock on an exchange. Initially, they were popular for this very reason and many private companies were eyeing them. However, an activity that receded as regulatory scrutiny took off the spotlight from it. Regardless, Trump saw the opportunity and took it victoriously.