The SPACs Are Back! NASDAQ on a High as Trump's Social Media Co Goes Public

FXOpen

It seems as though the sensationalism that surrounded the controversial SPAC listings, which suddenly found their way onto the technology-friendly NASDAQ exchange in 2021, was a long time ago.

Back at the beginning of this decade, many aspects of business and ways of life that had remained similar for a long period of time changed beyond recognition, and one of them was the admission of 'blank cheque' companies onto the NASDAQ exchange in the form of SPAC entities, with SPAC standing for Special Purchase Acquisition Company.

This method of suddenly going from a start-up status to multi-billion dollar publicly traded company within almost no time and with the ability to bypass much of the criteria required for public listing on major exchanges gave rise to the sudden influx of a number of previously unknown entities which had hardly any market share in their industry sector, yet were able to list their stock publicly for millions, sometimes billions, of dollars.

That era has passed, and many of those firms have experienced severe depreciation of their stock ever since, which has had some degree of effect on the volatility in the NASDAQ index over the tech stock doldrums the ensuing year.

Now, however, with the NASDAQ index flying high and investor appetite for tech stocks well and truly back on track, there is another interesting dynamic which has brought the concept of SPAC listings back into the public arena.

Today, the NASDAQ index was trading at 18,398 at 9.30 am UK time, which is another increment on the steady upward direction the index has been building upon all of this year so far since rebounding back from a low point of 14,127 in late November last year.

Indicative pricing only

One of the boosters of the NASDAQ index's performance is the listing of former US President Donald Trump's social media entity as a publicly traded company. Digital World Acquisition Corporation, which was founded via a SPAC listing, begins its life as a listed entity on the NASDAQ exchange today with a share price of $50 and a market value of about $6.8 billion.

In a significant move, Trump Media & Technology Group Corp. found itself under the wings of Digital World Acquisition Corporation as of Monday, the day on which Digital World Acquisition Corporation was founded via a SPAC purchase. This acquisition reshuffled the deck, placing Trump Media, the entity behind the Truth Social platform, in the spotlight on the Nasdaq stock exchange.

The transaction underscores a strategic manoeuvre as Trump Media's foray into the social media realm gains traction. With Truth Social poised as a challenger in the digital landscape, the merger with Digital World Acquisition Corp. marks a pivotal moment for both entities.

This shift in ownership signals potential growth opportunities for Trump Media, leveraging Digital World's resources and expertise. As Truth Social aims to carve its niche in the social media sphere, all eyes are now on how this acquisition will shape the future trajectory of both companies and whether it represents a genuine investment opportunity or a quick bit of action before the initial interest fades as with many SPAC listings.

President Trump was renowned for his use of social media to vent opinions and garner discourse or favour during his presidency, and therefore a social media company owned by him as well as being listed on an exchange via a blank cheque company is an interesting combination and a potential recipe for stock market volatility.

The combination of a high NASDAQ index value and the contribution made to that high by Digital World Acquisition Corp's listing and the potential either rise to success or fading to obscurity is interesting indeed.

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