(Bloomberg) — The impassioned retail investors who made the shell company tied to Donald Trump’s media venture the best performer of its kind just unleashed a new wave of support.
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Traders rushed into Digital World Acquisition Corp., the special-purpose acquisition company merging with Trump Media & Technology Group, on Tuesday following the launch of the former president’s social media network Truth Social over the weekend.
Shares of DWAC soared as much as 64% in premarket trading before paring gains, as Truth Social became the top free app in Apple’s App Store. It rose 10% as of 10:21 a.m. in New York.
Despite the fizzling market for SPACs overall, DWAC is an outlier. Fueled by both fervent Trump supporters and those hoping to cash in on the gains, the SPAC is by far the best performing company of its kind. It’s evolved into a way for those backing a Trump 2024 presidential run to show their support.
The app’s debut was filled with problems, however, as some interested users were unable to sign up and others received error messages. It’s now telling prospective users there’s a lengthy waiting list to register, with the message “We love you, and you’re not just another number to us. But your waitlist number is below.” As of 9:50 a.m., the queue was approaching 400,000 users and people were sharing screenshots of their numbers on Twitter.
Digital World’s trading has been similarly chaotic. The SPAC has rallied more than 750% since going public, with shares trading as high as $175 on Oct. 22 before plummeting more than 60% over the next week.
There’s been little insight for investors into how Trump Media will operate as a company. Currently, the plan is for a social network, a streaming service, a news channel and eventually a cloud-computing platform.
Regulatory scrutiny is already plaguing the venture. The Securities and Exchange Commission is looking into its board of directors, along with the trading and the identities of certain investors.
Still, excitement from retail traders was notable Tuesday with the SPAC among the 10 most actively traded stocks on Fidelity’s platform. The ticker was the most-mentioned on popular chatroom Stocktwits and touts on Reddit’s WallStreetBets forum were second only to an exchange-traded fund that tracks the S&P 500 Index.
“For conservative investors, it’s a trophy asset, sort of like GameStop was for the Reddit Apes,” said Max Gokhman, chief investment officer at systematic money manager AlphaTrAI Inc. “Everyone is waiting to see if the ‘Trump Truth Train’ can gather steam or if it goes off the tracks.”
(Updates with additional context, price moves)
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