Time to Dump Trump’s SPAC?
A few weeks ago, I wrote about how to play the hype around former President Donald Trump’s social media venture, Truth Social. This app is operated by Digital World Acquisition Corp. (Nasdaq: DWAC), a special purpose acquisition company (SPAC) that recently merged with Trump Media & Technology Group.
The stock was in play at that point, and it was just a matter of time before it surged again.
My thesis was as follows…
First, the hype would increase.
Then, more attention would be paid to the venture – no matter whether it was a good one or a bad one.
And lo and behold, this is exactly what happened.
Digital World is trading for more than $90 today after trading as high as $137 in the premarket period a few days ago.
Truth Social just launched on Apple’s App Store. And while it’s not available to everyone (it’s still in beta testing), there is a product (kind of) – plus a waitlist of the faithful.
As many launches do, this one had a lot of hiccups – kind of like when Obamacare was launched and there were a few embarrassing posts (the type supporting some nefarious characters).
Those errors should be forgiven – for now.
However, a month or a year from now, the market will not be so forgiving.
In truth, Truth Social will not be profitable for a while – if ever. But that won’t stop people from investing in it.
As Digital World’s shares have demonstrated, they could drop $40 just as quickly as they could go up $40.
While there will be future opportunities to both buy and sell the stock, the business model does not lend toward a stable, long-term hold. There are just too many land mines that could derail the project.
But if you did invest when I wrote about Truth Social back on January 13, here is what you should do…
Action Plan: TAKE YOUR INITIAL INVESTMENT OFF THE TABLE AND LET THE REST RIDE! There will be more catalysts to come – so the shares should trade even higher. That is why you want to let your profits ride!
Let us know how you did by dropping us a line here.
And my next recommendation… Start receiving more winning ideas like this one by joining us in The War Room. Every day we’re helping members hit winning trades. In fact, we’ve maintained a 76% win rate, meaning we’re winning about 8 out of every 10 trades!
More from Trade of the Day
How We Hit Two Holiday Double Digit Winners
Dec 4, 2024
Is MSFT ready to play catch-up?
Dec 3, 2024
“How to spot explosive moves before the crowd”
Dec 3, 2024