Trump's Truth Social Takes Massive Hit After Midterm Losses - Ring of Fire

[TexasTowelie]

Shares of Digital World Acquisition, the company seeking to merge with the Trump Media and Technology Group that includes Truth Social, took a nasty dive following the midterms, with investors worried that Trump no longer has any sway over the GOP. If he has no power over the Party, then he has no real draw to his social media site, and that could sink things even further down the road, as Ring of Fire's Farron Cousins explains.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

I think it's safe to say that obviously in this year's midterms, the Biggest Loser, of course, was Donald Trump. But it turns out that Donald Trump is not just facing angry Republican voters. He's not just facing angry Republican donors. He also is apparently now facing angry investors into digital world acquisition, the PAC company that is trying to merge with Trump Media and technology group, which of course includes truth, social. The day after the election, digital world acquisition, their shares fell 15% following the routing that Donald Trump's handpicked candidates took on Tuesday. So in addition to Donald Trump suffering those humiliating losses were the candidates he picked to run, endorsed them, showed up at their rallies, did multiple rallies. For some of them they lost. That was bad enough. He was off. Then the next morning, the company that's supposed to be buying out his media company, giving him 300 million, they lost a ton of money because their investors looked at what happened to Trump's people and said, Trump has no influence.

Why would I wanna buy a company from a guy that has no influence on politics? Like he's a negative influence on politics. He's actually toxic. So I'm taking my money and I'm running away. So digital World shares, as they have done pretty much every month for the last 12 months, went tumbling down the toilet yet again. And here's why that is so fricking hilarious. Reports came out about a week ago, week and a half-ish, telling us that a lot of, uh, Trump supporters who invested money into digital world had collectively lost millions of dollars as the price of the stock when they bought it was over a hundred dollars and, and now it's lost 90% of its value. On top of that, to make it even more deliciously hilarious, digital world is coming up against their deadline. If they cannot get 65% of their initial investors to agree to extend that deadline to purchase Trump media and technology, which they currently cannot do, because there is a criminal investigation into both entities. So that's on hold.

So if they can't extend that deadline based on the company's own founding charter, they will be forced to liquidate digital World acquisition and pay off all the remaining shareholders, not just the investors, but the people who bought stock. If they do that, the stock value that they would be reimbursed for would be under $10 per share. The same shares that they bought for over a hundred dollars a share, and now this week the stock goes down even further, which means they may get far less than $10 per share. So not only did Donald Trump lose in races across the country, he probably lost a couple hundred million dollars as well.

[cilla4progress]

1. Love the smell of schadenfreude

in the morning!!

[republianmushroom]

2. Oh, damn, that will leave a mark. Tsk Tsk Tsk

[Warpy]

3. Right wing plutocrats trying to get richer quicker

Getting hosed for a million or two is going to sting for a day or two, but it will soon pass. Smaller investors are always the ones who get hurt the worst, fanatics sinking their entire nest egg into harebrained schemes from Deal Leader.

Yes, I can feel a little sorry for them, but that will pass quickly, too.

Maybe some of them will finally catch a clue about TFG.

[Frasier Balzov]

4. This is probably also collateral damage from the crypto/NFT collapse.

Trump does seem like a commodore in the Bored Ape Yacht Club.

[vlyons]

5. yet another failed Trump business venture

How many is that now? 9? 10?

[LetMyPeopleVote]

6. Regulatory scrutiny means it will likely never merge with Trump's Truth Social media platform

I have been skeptical of the proposed merger between a SPAC and TFG's media company (the one sort of running Truth Social) ever being consummated. Special Purpose Acquisition Companies (SPACs) are sketch and the SEC is looking at these vehicles. It seems taht the SEC is really looking at the deal between a SPAC and TFG's shell company. In addition, SPACs can be sketchy as to valuation but in most cases the company being acquired has some value so that the proposed value of the merged company has some relation to reality.

It seems that some people are doubtful that TFG's media company and a SPAC

Link to tweet

https://markets.businessinsider.com/news/stocks/digital-world-acquisition-stock-price-dwac-trump-truth-social-kerrisdale-2022-4

Digital World Acquisition, the SPAC that plans to merge with former President Donald Trump's Truth Social, fell 9% on Wednesday after Kerrisdale Capital released a short report targeting the company.....

That view is driven by Kerrisdale's belief that DWAC will fail to complete its merger with Truth Social, combined with the fact that poor execution at Truth Social puts into question its ability to successfully launch an alternative social media platform.

"DWAC's stock has much further to fall given the demonstrably misleading statements in DWAC's registration statement, the status of TMTG's operations at the time the merger agreement was executed, the cast of characters seeking to consummate that merger and those individuals' flagrant disregard for SEC rules and regulations," Kerrisdale said.....

Digital World is already under active investigation by the enforcement division of the SEC, Kerrisdale highlighted. "DWAC is not just another dubious 2021 SPAC; it is a poster child for some of the worst abuses the investment vehicle has spawned," Kerrisdale said.

And even if a deal does get done between Truth Social and Digital World, the company's current valuation "is absurd and financial projections are based on the flimsiest of assumptions," Kerrisdale said.

If this deal does not close, Devin Nunes will be looking for work