Trump SPAC Digital World Acquisition Corp. rose Tuesday after former President Donald Trump's new social media app Truth Social launched over the weekend — albeit with widespread reports of glitches.
Shares of Digital World, the blank-check company that plans to take public Trump Media & Technology Group, which oversees Truth Social, rose 5.9% to 89.31 in the stock market today. DWAC stock climbed as high as 99, the best level since late October.
Trump's new social-media venture launched late Sunday. It's currently the top free app in the U.S. available on the iPhone, above HBO Max and Wordle. The limited launch followed an earlier test launch. Truth Social is not yet available on Android or the web.
Digital World began trading in September. Trump Media announced the Trump SPAC deal in October. DWAC stock currently has a $3.3 billion market valuation, according to MarketSmith.
Trump earlier expressed hopes that Truth Social would compete with the likes of larger, more established social-media sites, like Meta's Facebook and Twitter. Those platforms banned Trump following the riots at the U.S. Capitol on Jan. 6 last year.
Trump Media & Technology Group has tried to position itself as a force of resistance against big tech companies opposed to conservative voices. Trump Media in December named Former California GOP Rep. Devin Nunes, a Trump supporter, as CEO.
Nunes has previously said that Truth Social would fully roll out by the end of March.
Questions About Platform, Trump SPAC Deal
But some users following Truth Social's launch reported difficulties logging in, creating accounts and being wait-listed. The platform, in an update on Monday, said it had "stabilized the account creation process." And it said it was "working to increase the rate of new account creation."
"Due to the overwhelming demand at launch, we are currently rate-limited on onboarding new users to the platform," an earlier update read.
Analysts have also had questions about whether the app can compete longer term against its big-tech rivals, as well as questions about investor-presentation materials some have said were light on specifics.
Truth Social, being a conservative Trump vehicle, has a potentially large audience but also some limits. Facebook and Twitter rely almost entirely on advertising revenue. Big advertisers may be reluctant to make a big presence on Truth Social.
The analysts also had questions about the speed and timing of the deal between the Trump SPAC and Trump's media venture.
Timing Of Debut Questioned
SPACs, or special-purpose acquisition companies, are already publicly traded, and exist to take an already-existing private company public. The process of finding a private company and working out a deal can take months, as opposed to the roughly three weeks that passed between the debut of DWAC stock and the deal it announced with Trump's media company.
Such a narrow window, experts have said, can raise suspicions that the SPAC had the target in mind from the start, potentially testing the limits of securities law. The New York Times reported in October that Trump and DWAC's CEO had been discussing a possible deal since at least March 2021.
Additionally, Digital World Acquisition in December disclosed that it had received "fact-finding inquiries" from FINRA and the SEC.
