'Trump SPAC' Stock Soars 10x... Earning 1.5 Times Its Assets

"Meme Stock Craze, Some Predict It Won't Last Long"

(Photo by AFP)

[Asia Economy Reporter Yujin Cho] The stock price of the Special Purpose Acquisition Company (SPAC) merged with former U.S. President Donald Trump's social media surged nearly 10 times in just two days due to a flood of individual investors buying.

According to Bloomberg and others on the 24th (local time), the SPAC "Digital World Acquisition" (DWAC), listed on the U.S. Nasdaq, soared 846% since the 20th.

The surge was driven by a massive influx of individual investors following the announcement of a merger with Trump's social media company, Trump Media & Technology Group (TMTG).

DWAC's stock price, which closed at $9.96 on the 20th before the announcement, closed at $94.20 on the 22nd, nearly 10 times higher. On that day, the stock price rose 107.03% before profit-taking sales caused it to drop 14.38% in after-hours trading.

Bloomberg estimated that the merger company's valuation, initially assessed at $875 million, soared to $8.2 billion (approximately 9.6 trillion KRW) thanks to the stock price surge.

According to documents submitted to the Securities and Exchange Commission, former President Trump is expected to hold more than 50% of the merged company's shares.

Based on the current valuation alone, it is anticipated that former President Trump could increase his assets by more than $4 billion (approximately 4.7 trillion KRW) through his stake in the merged company.

According to Bloomberg's billionaire index, Trump's net worth is around $2.5 billion. This social media company listing alone could earn him more than 1.5 times his current assets.

However, Bloomberg pointed out that the recent stock surge driven by expectations for Truth Social resembles meme stocks that move like a rollercoaster, making it difficult to guarantee valuation gains.

Previously, meme stocks such as GameStop and AMC Entertainment, which experienced investment frenzies through Reddit, repeatedly surged and plunged after abnormal spikes.

This news came as former President Trump has been struggling in business following the COVID-19 pandemic and his failed re-election bid.

The sale process of the Washington DC hotel has been stagnant for two years, and due to the commercial real estate slump, more than half of the Trump Tower in Manhattan, New York City, remains vacant.

As a result, former President Trump failed to appear on Forbes' list of the top 400 richest Americans for the first time in 25 years, announced earlier this month.