Trading in the stock of SPAC company Digital World Acquisition Corp. was briefly halted Thursday because of volatility after its price skyrocketed on extremely heavy trading volume after news of a merger that would launch former President Donald Trump’s planned social media platform.
DWAC’s stock surged as much as 400 percent, to $51 per share Thursday after trading was halted multiple times due to volatility.
Digital World Acquisition was the single most actively traded stock on the Fidelity platform Thursday, and was by far the most traded stock on the consolidated tape of New York Stock Exchange and Nasdaq listings.
Buy orders for DWAC — a so-called special purpose acquisition company set up to raise capital in the public markets to purchase private firms — outnumbered sell orders by nearly three to one on Fidelity’s platform.
By afternoon trading, more than 360 million shares of DWAC had already changed hands, according to FactSet.
In comparison, SPY, the exchange-traded fund that tracks the S&P 500, had only traded about 20 million shares around the same time.
In a press release Wednesday night, Trump’s new company, Trump Media & Technology Group, said it and DWAC “have entered into a definitive merger agreement, providing for a business combination that will result in Trump Media & Technology Group becoming a publicly listed company, subject to regulatory and stockholder approval.”
Trump also said he would roll out the platform called “Truth Social,” which he claimed will “stand up to the tyranny of Big Tech.”
Trump has been banned by the social media giants Twitter and Facebook since early this year after he was accused of inciting the Jan. 6 Capitol riot by a mob of his supporters.
In the press release Wednesday night, the ex-president’s new company said its “mission is to create a rival to the liberal media consortium and fight back against the “Big Tech” companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America.”
The ticker DWAC was among the top 10 most popular names on Reddit’s WallStreetBets chatroom Thursday, even exceeding meme stock GameStop’s mentions, according to alternative research provider Quiver Quantitative.
That could be a sign that retail investors active on social media platforms were fueling the rally in the SPAC.
The Securities and Exchange Commission did not immediately respond to a request for comment.
Patrick Orlando, CEO of DWAC, spent five years at Deutsche Bank, where he worked with emerging Markets fixed income derivatives.
Orlando later moved into the South American sugar industry and is currently involved with at least three other SPACs, or so-called blank check companies: Yunhong International, Benessere Capital Acquisition, and Maquia Capital Acquisition.
Orlando is CEO of Yunhong International, which was incorporated in the Cayman Islands in 2020 and which lists its headquarters in Wuhan, China.
The city of Wuhan is also the origin point of the coronavirus, which causes Covid-19, the pandemic disease which has ravaged the world for the past two years.
Both as president and since then, Trump referred to Covid as “The Wuhan virus,” and insisted that the pathogen was deliberately released from a Wuhan virology lab.
The chief financial officer of Digital World Acquisition is Luis Orleans-Braganza, a member of Brazil’s parliament and a supporter of the far right president, Jair Bolsonaro.