This time last month, hedge funds owned most if not all the shares of blank-check company Digital World Acquisition Corp. Lighthouse Investment Partners owned 11% of it. Saba Capital Partners held 9% and D.E. Shaw & Co. 8%, with the likes of Highbridge Capital Management, K2 Advisors and Boothbay Fund Management rounding out the rest. Today, a day after the SPAC announced plans to merge with former President Donald Trump’s planned fascist social network and media empire, not so much.
Digital World Acquisition Corp. shares more than doubled to $94.20 on Friday after trading as high as $175. Trading in the stock was heavy, prompting a number of brief trading halts…. “This is the new hot meme stock,” said Matthew Tuttle, whose firm Tuttle Capital Management runs a few exchange-traded funds tied to special-purpose acquisition companies and the companies they take public….. “It’s a level of speculation that I once thought unfathomable,” said Julian Klymochko, who manages a SPAC-focused fund at Accelerate Financial Technologies.
“Lighthouse was not aware of the pending merger and no longer holds unrestricted shares of the SPAC,” the fund said.
Saba sold its holdings in the first hours of trading, making a small profit — but before Digital World’s shares shot up, missing out on a huge gain. [Founder Boaz] Weinstein said in a statement: “I knew that for Saba the right thing was to sell our entire stake of unrestricted shares, which we have now done. Many investors are grappling with hard questions about how to incorporate their values into their work. For us, this was not a close call.”
Also not particularly eager to get in on it, but very eager to see DWAC continue to skyrocket is Trump’s former communications guru Anthony Scaramucci, demonstrating once again his unerring political instincts.
“I want that thing to go up like another 10 times. The more it goes up, the less likelihood Donald Trump is running for president in 2024, so I’m rooting for that SPAC,” said Scaramucci…. “I am not into media disinformation and garbage propaganda, so no, I would not buy it. I try to stay away from those things,” said Scaramucci, who also encouraged any Wall Street firms that owned DWAC before it became linked to Trump to dump their holdings. Some already have done that.
Anyway, for those eager Redditors and right-wing day traders bidding up the stock, here’s a little taste of what you’re buying at a valuation of several billion dollars.
Within two hours, hackers had gained access to a private version of the social network, creating fake accounts for Mr. Trump; the far-right personality Stephen K. Bannon; Ron Watkins, the QAnon conspiracy theorist; and Twitter’s chief executive, Jack Dorsey…. Using a false “donaldjtrump” account, hackers posted images of defecating pigs, wrote expletive-laced rants aimed at Mr. Dorsey and inquired about the whereabouts of the former first lady Melania Trump….
In exposing the innards of Truth Social ahead of its launch, hackers demonstrated that Mr. Trump’s soon-to-be-released social network had lax safeguards and left open the ability to spoof anyone, including the former president.
DWAC, the Trump Social-Media SPAC, Soars in GameStop-Like Frenzy [WSJ]
Hedge funds make millions as shares in Trump media Spac jump [FT]
Two hedge funds sell stakes in Trump SPAC firm DWAC after merger news, big stock price rise [CNBC]
This Hedge Fund Manager Dumped Trump [DealBook]
Scaramucci says he hopes the Trump SPAC keeps soaring so he doesn’t run for president again [CNBC]
Hackers lay claim to Donald Trump’s social app before its launch. [NYT]
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