TWTR - DWAC: If You Believe In The Trump Meme Then Buy The Warrants And Sell The Stock
- DWAC shot up 840% in two days upon the announcement of a merger with Trump Media & Technology Group.
- The stock closed at $94.20, implying an intrinsic value of $82.70 for DWACW. But DWACW closed at $29.10.
- A review of my previous SPAC article on HLBZ shows how a stock can crater post-merger but the warrants can have some temporary upside as a massive arbitrage gap closes.
- When considering the pro forma valuation between DWAC and TMTG, it would range between $12 billion to $20 billion for a startup social media company.
- I believe that DWAC is a strong sell, but if you are a believer and long-term investor, DWACW makes an unambiguously better deal.
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DWAC: If You Believe In The Trump Meme Then Buy The Warrants And Sell The Stock