Could we see a huge price increase for
this stock next week? Today I want to
talk again about the SPAC that has made
SPACs great again. The stock is of course
Digital World Acquisition Corp. Ticker: DWAC
(NASDAQ: DWAC) The huge interest here has cooled
off over the past week but I feel there
is still huge gains to be made from this.
After initially seeing a huge price
increase and then dropping back down
(NASDAQ: DWAC) is still about 500% up from its IPO
price. But this stock has become one of
the most shorted stocks on the market
and this provides another huge
opportunity in the right conditions. If
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I'm not a financial advisor, this is not
financial advice. I encourage everyone to
do your own research if you're thinking
about investing in this or any other
stock. Now let's dive into it.
(NASDAQ: DWAC) currently has the highest notional
short interest among SPACs.
This was the most popular stock in the
world a few weeks back,
but if you're new to this I will cover
this briefly
(NASDAQ: DWAC)
is the spac or special purpose
acquisition company that is gearing up
to take Trump Media and Technology Group
(TMTG) public. Trump Media's focused entity
has been accorded an initial enterprise
value
of $875 million dollars
for its part TMTG plans to utilize the
$293 million in cash
that is already held in trust by digital
world acquisition corp,
to launch a dedicated social media
platform -
Truth Social.
Additionally TMTG also intends to launch
a subscription-based Non-Woke video-on demand
service
to rival Disney ($DIS)
and Netflix (NASDAQ: NFLX)
as well as a cloud-based offering under
the tech stack
suite of products to rival Amazon and
Google.
This SPAC currently has the highest
in-class
notional share interest
at 318 million dollars.
This corresponds to an SI of 16.98
of Digital World Acquisitions entire
float
behind only
altimeter growth corporation with an SI
of 34% of its float.
So on one hand the bull's perspective is
that this back is an opportunity to tap
into trump's committed base of
supporters in order to extract maximum
possible value from the former
president's media focused initiatives.
And on the other hand the BEAR
perspective is that this SPAC is nothing
more than a hyped up cash repository.
As an illustration assuming no
redemptions Digital World Acquisitions
current cash balance amounts to only
$7.87 per share based on the 293 million
in cash proceeds held in trust and the
37
million outstanding shares. In other
words the SPACs shareholders are
currently paying $64
to require a share that entails a
windfall of just $7.87.
This itself presents a no-brainer short
if one assumes the TMTG's initiatives
aren't financially viable in the long
run.
Now this is something that I've spoke
about
in ,I think, all of my previous (NASDAQ: DWAC)
videos.
We have no financials we have no data on
TMTG.
we're basically investing
in the hope that this company can become
a huge company. We've seen their
investors presentation,
we've seen their vision. Whether or not
they can actually achieve it
is debatable.
But this is where I feel this article
gets very interesting
(NASDAQ: DWAC) sponsors led by Patrick Orlando (CEO)
will receive the entirety of the funder
shares up front.
Additionally all DWAC shareholders will
be subjected to a post-merger lock-up
period of just 150 days, should the stock
price stay above $12 per share.
So we've seen his backs go crazy last
year and into early this year
everyone will remember churchill capital
CCIV, that is now LUCID,
that stock was talked up as if it was
going to be in the hundreds of dollars
before it came crashing down. And we seen
an even bigger crash in the likes of
Quantumscape ($QS) which reached as high as
132 dollars before crashing down into
the 20s.
Since then however we have seen
incentives for sponsors hugely curtailed
with founder shares now generally being
awarded only when certain performance
milestones are met.
For example
should the TMTG price consistently stay
above $30 in the post-merger phase tmtg
owners would receive an additional 40
million shares of the combined company
at the current stock price
and by adding in the proposed 40 million
bonus shares
and warrants
the entire post combination company
could be worth as much as 11 billion
dollars. so the conclusion of this
article says the digital world
acquisitions elevated stock price and
its soaring short interest are symptoms
of a fundamental battle around its
narrative
if TMTG's ambitious initiatives pan out
then they will justify the stance of the
bulls
however given the deal structure the
odds are currently stacked against the
bullish narrative.
But I feel that given the level
of short interest in this company right
now this presents another possible
opportunity
total short interest in the spac sector
had been declining over the past few
months as large back short positions
such as cciv
ipoe
and sbe were all despacked
but we have seen a recent rise in space
short interest
and most of this increase can be
attributed
to new short selling activity in (NASDAQ: DWAC)
this can be seen here very clearly in
the short interest percentage
and we can see here that the majority of
the spac short selling gwac short
interest increased by
318 million dollars
as its stock price rose
over 500 percent in october
looking at trading view we can see the
huge run-up that this stock had followed
by a huge drop
after reaching 175 dollars it then
dropped as low as fifty four dollars
before gaining back into the mid
seventies
from this point on
we can see that (NASDAQ: DWAC) has been hitting
both
lower highs
and higher lows
which is clearly forming this descending
wage
this can be seen as a very bullish
signal
of a breakout upward movement
at the moment (NASDAQ: DWAC)'s trading volume has
dropped very low
and with low volume
(NASDAQ: DWAC) is still holding its value in this
range
but I suspect that if we have some good
news either tomorrow or over the weekend
we might see a rapid price increase next
week
if you were swing trading this and
making
good profits on the volatility which
there's plenty of the next week
could be a very risky
proposition as we approach the pinnacle
of this wedge
now in my previous video I talked about
taylor green
disclosing that she had invested up to
50 000
in (NASDAQ: DWAC)
and earlier this week another republican
that he purchased the stake
in (NASDAQ: DWAC)
worth somewhere between one thousand and
fifteen thousand dollars
as it says here his investment is the
second disclosed (NASDAQ: DWAC) purchase by a
member of congress
after cnbc reported last week
miss taylor green's share purchase
another major issue that has dogged (NASDAQ: DWAC)
stock over the past week has been the
news story that donald trump and patrick
orlando may have violated securities
laws but with the merger between (NASDAQ: DWAC)
and tmtg
this is something that i've been looking
at all week
and i've come across some good info and
there's a lot to discuss here so i'm
going to leave this for my next
(NASDAQ: DWAC) video that I hope to get out to you
sometime on saturday morning
so guys that brings it to the end of the
video if you've watched all the way
through then hit that like button it
really helps the channel out a lot what
do you think will happen here in the
coming weeks and is there anything in
particular about (NASDAQ: DWAC) that you would
like me to discuss drop a comment and
let me know what you think if you're new
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and i'll catch you in the next one