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Digital World (DWAC) Stock Has Fallen 66.8% YTD. What’s Next?

Simon Mugo trader
Updated 31 Oct 2022

Trade DWAC Stock Your capital is at risk

Key points:

  • Digital World Acquisition (DWAC) stock has fallen 66.8% this year.
  • The company faces multiple headwinds, which could drive it lower.
  • Read on to find out why there may be better investments than DWAC.

The Digital World Acquisition Corp (NASDAQ: DWAC) stock price has fallen 66.8% this year, and many experts are warning of more trouble ahead for investors. The special purpose acquisition company (SPAC) is set to delay for the fourth time a shareholder meeting to approve its merger with Trump’s social media app Truth Social.

The merger between DWAC and Trump Media and Technology Group (TMTG) has been pending for a while now, with a shareholder meeting to approve the merger proving difficult to organise given that majority of DWAC’s shareholders are retail investors who are not keen voters.

Also read: The Best Cheap Tech Stocks Under $10.

Many expect DWAC to postpone the latest meeting set for November 3, 2022, amid fears that it will not get the approval of 65% of its shareholders, allowing it to move ahead with the business combination. As a result, that will be the fourth postponement, which could lead to significant shareholder fatigue, making it difficult for the firm to organise such a meeting later.

DWAC faces other headwinds, including the slow uptake of Truth Social among its target customers, primarily fans of former President Donald Trump. The platform has struggled to attract new users, with Trump managing to attract only 4 million followers, compared to the 70 million followers he had on Twitter.

Another looming headwind is Elon Musk’s acquisition of Twitter, which could see Donald Trump’s permanent ban on the platform being reversed. Once Trump is back on Twitter, the desire for users interested in his views to join Truth Social will decline significantly.

Therefore, while Trump and Elon use Twitter similarly, his return to the microblogging platform could spell doom for his Truth Social app. However, with Trump looking set to run for the presidency again in 2024, he might have little choice but to be active o Twitter due to his large following, who are all potential voters.

These are a few of the many headwinds facing DWAC, which seems doomed to continue trading at its current valuation or lower.

*This is not investment advice.

DWAC stock price.

DWAC stock price 31-10-2022
Source: Tradingview

The DWAC stock price has fallen 66.79% in 2022, but experts warn of more trouble ahead.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading