Will Trump Push HIS Stock Higher?
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I don’t like mixing investing with politics. But it’s next to impossible to avoid getting political when you have “Trump” in the headline.
No matter what you think of the former president, you have to hand it to him when it comes to self-promotion. He may be the very best at that game.
And now he has a vehicle in the stock market (not his first) to expand his reach over a public that shows no slowdown in its appetite for social media.
A few months ago, Trump lent his name and efforts to a special purpose acquisition company (SPAC) called Digital World Acquisition Corp. (Nasdaq: DWAC).
On that announcement, Digital World soared from $10 to more than $130… and then fell all the way back to down $40 in a span of about two months. It was profitable for some… and wildly painful for others.
Now Digital World is back on the move again as it prepares to launch its own social media platform called “Truth.” Depending on your bent, that name is either accurate or the biggest joke in the market.
But we’re not here to judge. Let’s take a closer, more objective look at the possible outcomes of this venture.
First, let me say that the platform is expected to go live on Presidents Day 2022 – remember what I said about Trump’s knack for self-promotion.
As we approach that date, Digital World should see a nice run-up – albeit a volatile one.
However, the business itself may not live up to the hype. (It wouldn’t be the first Trump business to end in bankruptcy court.)
Sure, there is a big, open space in social media – anyone who has internet service is a potential customer.
But companies like Meta Platforms (Nasdaq: FB) and Twitter (NYSE: TWTR) have already plowed billions into the space to acquire users and develop technology over a period of many years.
Digital World… well, maybe it can spend a few million, depending on how much cash it has on hand.
Digital World will attract users that form a sort of echo chamber, much like Parler did. These sites cannot make money without selling advertising. So you have to ask yourself how broad the reach of a “single party” platform will be. Parler was not very successful.
Then you must consider the waning popularity of the former president. He’s still popular, to be sure. But the most recent polling is showing that support for him to run for president in 2024 is dropping amongst Republicans.
Maybe he’ll devote his efforts to this project instead. But there is huge risk involved, as the entire project is based around one man, an older man at that, whose popularity may be trending in the wrong direction.
It’s kind of like betting on Michael Jordan after he’d won six titles – it could go either way.
Action Plan: The market has a huge capacity for hopes and dreams. And with a small float of shares, this stock could easily see astronomical numbers.
But it could plummet just as fast.
Want to find out how to win either way?
It’s called the Win-Both Ways Trade. The first test for this stock will be in February, when it goes live.
To set yourself up to win whether the stock moves up or down (it just has to move big!), learn more about the Win-Both-Ways play here.