Trump's problem...
by Kbyrnes (2024-03-25 14:58:54)
Edited on 2024-03-25 17:52:30

In reply to: If it follows typical SPAC deal trajectory  posted by IAND75


...is that he typically acts as if his name provides all the value, while goods and services are considered secondary. Think of Trump U, Trump steaks, etc., etc.

Amazon bled money for quite a while, but Bezos had an actual business plan to make money by providing a service most people never realized they'd need...until they did, and in the hundreds of millions. That's why Amazon, similar to many other companies, went from being money losers to being giant home runs. What's the business plan for Truth Social, other than hoping that people who have their choice of any number of social media platforms make it a "killer" app?

Here is an interesting take from last year, updated to February 2024: Truth Social Statistics 2024: How Does It Compare?

Here's a snippet that is, I think, relevant to your point:

"Rather than pursuing a traditional IPO, the Trump Media & Technology Group decided [in 2021] to merge with a blank check company called Digital World Acquisition Corp (DWAC) which was already listed on the NASDAQ.

"After announcing the merger, the DWAC stock jumped to highs of $101, valuing the company at about $3.9 billion.

"But the stock price has slowly been coming back down and as of April 2023, is around $13 per share."

________________________
DWAC is a SPAC, a special purpose acquisition company, founded in December 2020. It started trading on NASDAQ in September 2021, with its IPO. A month later, Trump's company announced they planned to merge with DWAC, and its stock price went up about 356% in one day. DWAC has experienced various vicissitudes since then, with the initial exuberance burning off by the 2nd half of 2022. In 2023 the stock traded between about $12.50 and $20.00.

If the Wikipedia article on DWAC is to be trusted (and most of its claims are footnoted), DWAC has had various connections with Chinese firms, including one that had been looked at by the SEC for "misrepresenting shell corporations." Also, DWAC wound up returning or giving up on about $1 billion to investors whose funds had been intended to go into a "private investment in public equity (PIPE)" transaction; see SPAC to return remaining $533 million raised for Trump social media deal.

This has the scent of a lot of funny money activities and come-ons, but of course that's just my opinion.