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Related: About this forumExperts Predict Trump's Truth Social Could Be Completely Worthless In Under 6 Months - Farron Balanced
Donald Trump stands to make billions of dollars off the merger with Digital World Acquisition, but that money would only appear if he were able to sell his shares right now. But he's forbidden from selling for at least 6 months, and a Pulitzer Prize-winning economics reporter says that by the time Trump can sell, the company will likely have ZERO value at all, meaning Trump won't get that massive payday that he's anticipating. Farron Cousins explains what's happening.
TwilightZone
(25,622 posts)It's a meme stock, and its value has little or no connection to any kind of financial reality. Speculators and some of Trump's rich pals may help keep it propped up for long enough for Trump to cash out.
Also, he can sell prior to six months if he gets a waiver from the board. Since the board is pro-Trump, this is not out of the realm of possibility.
GopherGal
(2,021 posts)Owning it gives "bragging rights" in certain social circles, maybe a certificate to frame and hang on the wall (I'm just speculating). So it may maintain some monetary value for those purposes.
3Hotdogs
(12,586 posts)Jared could broker that.
unblock
(52,773 posts)And even if that's not legal, not sure how that could be enforced if he can find someone willing to make a private loan.
Kid Berwyn
(15,449 posts)Worthless, just like its owner.
Blue Owl
(50,932 posts)Martin68
(23,225 posts)LetMyPeopleVote
(146,701 posts)Meme stocks rely on the greater fool theory. I was amused to see that DWAC/Trump Media is classified as a meme stock where the value is due to personality and not due to the real value of issuer of the meme stock. This article is a good discussion of the meme nature of DWAC/TMT.
https://www.vanityfair.com/news/donald-trump-truth-social-media-merger
Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. Its chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. Thats the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......
DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way thats significantly divorced from the reality of their underlying business. Combine those two trends and youll start to see why Trumps media company could be valued at roughly $9 billion if it merges with DWAC.
Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the greater fool theory of investing, meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. Here youve got ideology involved [too]as far as I can tell, the vast majority of DWAC investors are Trump political investors, and theyre to some degree putting their money where their mouth is My suspicion is most of them have bought the stock as a show of political support. In this way, Trump is conducting yet another public fundraising from his supportersthis time through the public markets.
Idiots who purchase meme stocks are betting that they can get out before the other idiots figure out that the stock is worthless