In late December of 2021 I wrote a column about Donald Trump’s Truth Social business venture and the prospect it could go public by merging with a Special Purpose Acquisition Company (“SPAC”) called Digital World Acquisition Company (“DWAC”). While Truth Social remains a private company, DWAC is a publicly traded company listed on the Nasdaq that you can buy shares in. Buying shares in DWAC is, theoretically, like buying shares in Truth Social. The goal is the two companies will merge and shareholders will ultimately own a piece of Trump’s social media company. I did not opine on whether DWAC would be a good investment or not, however, I did caution Radicalized Right Wingers from making an emotional decision when it comes to investing their hard-earned money.
Since that column was published, shares of DWAC have plummeted around 66-percent.
In other words, if you invested $1,000 in December 2021, you have less than $350 left. If you’re on Reddit, you’ve probably heard the stories from dozens of Trump supporters who have lost thousands of dollars on his endeavor. One disabled military veteran claims to have lost 85-percent of his life savings.
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As an investor and a former Bankruptcy Trustee, I never like hearing stories about hard-working Americans losing money on investments. The purpose of investments, whether it’s stocks, bonds, real estate or whatever, is to get ahead. I understand it’s difficult to completely divorce emotion from money, but the more dispassionate you are as an investor, the better your chances you wind up in the black.
That is not the case for thousands of Americans – not to mention quite a few Idahoans—who are betting on Donald Trump and his upstart social media company.
That being said, part of the blame lies with those very investors. Not because they’re believing in Donald Trump, but because they’re not voting. If you are a Trump investor, or if you know a Trump investor, you need to get out the vote. Not in November, but now.
Here’s the deal. When you buy a share of stock in a company, you don’t just buy the chance to profit from an increased stock price or dividend, you actually buy rights. As a shareholder, you get to vote on certain issues within the company. Granted, if you’re holding 100 shares of company XYZ, your vote probably doesn’t count for much. That’s especially true for established companies, like Apple, where large institutional investors hold most of the stock.
However, one of the things that makes DWAC different is that the vast majority of shareholders are so-called “retail investors.” In other words, people like you and me. The problem with people like you and me is we don’t really pay attention to voting our shares. In most cases it doesn’t matter. But, when it comes to the future of Truth Social, it matters a lot.
The problem with DWAC and Truth Social, at the moment, is that they’re weathering a bunch of legal and financial problems. The SEC is investigating DWAC and Truth Social is bleeding money. If the two companies can merge, that could solve a lot of those problems. The thing is, they need time to sort all of that out. If they can delay the merger for another year, that could give them time to settle with the SEC, get on better financial footing, and move forward. In order to get that delay, they need 65-percent of DWAC shareholders to approve. Unfortunately, too many retail investors are either ignoring or refusing to vote on the issue. If you are one of the thousands of Americans who has lost money on Truth Social’s potential, your best bet to recoup your money is to vote for the delay in the merger. Otherwise, you’re looking at a payout of about $10 per share – a huge loss.
I get the irony that Radicalized Right Wingers – who claim to hate Wall Street – decided to play the Wall Street game and are losing their shirts, in part, because they didn’t vote. But when it comes to money and a person’s livelihood, I don’t care about politics. I care about these people recouping their losses. With that in mind, if you are a Truth Social investor trying to salvage your investment – you need to vote. Tell your fellow investors to do the same and tell them now.
And that’s the Truth.