After receiving approval from the US Securities and Exchange Commission (SEC), shares of Trump's blank check company soared
On Thursday (February 15), after receiving approval from the US Securities and Exchange Commission (SEC), the stock price of Trump's blank check company soared.
The Zhitong Finance App learned that Digital World Acquisition Corp (DWAC.US) once surged 29% during the day's trading, the biggest increase in a single day since January 22. This rise comes after the SEC announced the official entry into force of its proposed commercial merger plan with Trump Media and Technology Group (TMTG).
The merger between this special purpose acquisition company (SPAC) and Trump's media company, which owns social media platform Truth Social, has been delayed for more than two years due to regulatory issues. Matthew Tuttle, CEO of Tuttle Capital Management, said: “The biggest obstacle to the merger has now been removed, and all that is needed now is a shareholder vote.”
Digital World said in a statement on Wednesday that it is expected to announce the date of the special shareholders' meeting within two business days. Devin Nunes, CEO of Trump Media and Technology Group, said in a press release: “We founded Truth Social to be a safe haven for free speech, so people can regain their right to speak out.”
This week, Digital World also updated its registration statement and announced new board member nominations, including former US Trade Representative Robert Lighthizer, who served in the Trump administration, and Linda McMahon, former Director of the Small Business Administration and former CEO of World Wrestling Entertainment (WWE).
Digital World's shares have risen by more than 180% so far this year, partly due to Trump's re-election campaign for the Republican nomination for president, who has long been viewed as a frontrunner.
In addition to rising stock prices, Digital World also has a high volume of call options trading. In the first hour of trading on Thursday, the ratio of the volume of call options to put options reached 5 to 1. Investors bid for the former higher than the latter, which indicates an increase in market demand for short-term upward space compared to downside protection.
Other Trump-related stocks also showed upward momentum on Thursday, including video platforms Rumble (RUM.US) and Phunware (PHUN.US), a software company that designed apps for Trump's 2020 campaign. Both companies' stock prices rose more than 12% before returning to gains.