DWAC Stock Pops as Google Approves Truth Social App for Android

dwac truth social

dwac truth social

Digital World Acquisition (NYSE: DWAC) stock is trading higher today after Google approved Truth Social App for Android. The App was available on Apple Play Store but Google had put the approval on hold over content moderation issues.

Truth Social is the social media venture of former US President Donald Trump’s TMTG (Trump Media & Technology Group). TMTG is Trump’s latest business venture as the former President seeks to challenge what he sees as the tyranny of Big Tech.

Social media companies like Facebook and Twitter banned Trump following the Capitol Hill violence in 2020. Trump, as well as many conservatives often rue that Big Tech is biased against conservatives.

There was a surge in the popularity of social media companies like Parler which are seen as friendly towards conservatives. Rumble also went public capitalizing on the SPAC (special purpose acquisition company) mania. While most de-SPACs trade below the IPO price, Rumble has managed to hold above the IPO price despite the broader market slump.

Even DWAC is trading above $10 even as it trades at a fraction of its all-time highs. TMTG is trying to capitalize on Trump’s popularity and many Trump fans bought DWAC stock.

DWAC Stock Rises after Google Approved Truth Social

Android users in the US could not download Truth Social due to the ban. However, now Google has approved the App. Markets are excited about the news and DWAC stock is up double digits in premarket price action today.

Commenting on Google’s decision, TMTG CEO David Nunes said, “It’s been a pleasure to work with Google, and we’re glad they helped us to finally bring Truth Social to all Americans, regardless of what device they use. Today marks a significant milestone in our mission to restore free speech online.”

Nunes is a former Republican lawmaker who quit active politics to head TMTG. While he does not have any experience running a social media company, his proximity to Trump apparently got him the job.

As with Trump’s cabinet when he was the President, there has been massive turnover at TMTG also. Many top executives have quit the company amid the slow growth of Truth Social. Even Trump has just about 4 million followers there, which is way below the nearly 90 million Twitter subscribers he had before his account was banned.

DWAC-TMTG Merger Is in Trouble

While Google approving Truth Social is a positive for TMTG and by its extension DWAC, the merger is facing several headwinds. DWAC has to seek stockholder approval to delay its merger with TMTG.

The company has now delayed the voting on the proposal four times and has now set the stockholder vote for November 3. Trump has already said that in case the merger does not go through, he would keep the company private.

Most of DWAC’s stockholders are retail investors who typically don’t participate in such voting. However, in order to delay the merger, DWAC needs approval from at least 65% of the stockholders. If it fails to get the approval, it would need to dissolve.

The PIPE investors are also having second thoughts about their investments. DWAC had previously lined up $1 billion in PIPE investment for TMTG. In a recent SEC filing, it said that it has lost $138.5 million in financing from these investors. DWAC also changed its address to a UPS Store in Miami.

Meme Stock Mania has Subsided

DWAC joined the list of meme stocks as it soared to almost $100, which was 10x the IPO price. However, the stock has since cratered as the meme stock trade has unwound.

Also, with Elon Musk now reviving the abandoned Twitter acquisition, TMTG faces yet another challenge. Musk has rediscovered himself as a “free speech absolutist” and might loosen Twitter’s content moderation policies.

Musk even proposed to restore Trump’s Twitter account but he turned down the offer. The former President is instead working to promote Truth Social which is a Twitter competitor.

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