Trump-Linked SPAC Digital World Is Plunging Amid Ex-President's New Hampshire Win: What's Going On?
Portfolio Pulse from Shanthi Rexaline
Shares of Digital World Acquisition Corp. (NASDAQ:DWAC) dropped 8.02% in premarket trading despite Donald Trump's win in the New Hampshire Republican presidential primary. The decline follows a significant rise in the stock price on Monday and Tuesday due to anticipation of Trump's victory and an SEC filing suggesting progress in DWAC's planned merger with Trump Media and Technology Group (TMTG), which owns Truth Social. The merger has faced delays due to regulatory scrutiny and shareholder hesitance.
January 24, 2024 | 1:52 pm
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Digital World Acquisition Corp.'s stock fell sharply in premarket trading despite Trump's New Hampshire primary win, following a significant prior rally.
The stock's decline can be attributed to a 'buy-the-rumor, sell-the-news' market reaction, where investors may have anticipated Trump's victory and are now taking profits. The recent SEC filing indicating progress on the DWAC-TMTG merger likely contributed to the earlier rally, but with the news now priced in, the stock is correcting. The ongoing regulatory scrutiny and shareholder reluctance to approve the merger add to the uncertainty, potentially contributing to the stock's short-term volatility.
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