TWTR - Why Did Digital World (DWAC) Stock Fall 5% Today?
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Digital World Acquisition (NASDAQ:DWAC) stock fell 5% after Elon Musk committed to purchasing Twitter (NYSE:TWTR) at the original price of $54.20 per share.
TWTR stock closed up 22% on the news.
As the company looking to take Trump Media & Technology Group public, DWAC stands to lose if Musk successfully takes over Twitter. A self-declared “free speech absolutist,” Musk has promised to restructure the social media giant. If he can successfully do this, it will likely be the final nail in Truth Social’s coffin.
What This Means for DWAC Stock
With Twitter intent on closing the deal, Digital World is likely to fall much further. And DWAC stock has already lost more than 70% over the past six months.
This news from Musk comes at a time when DWAC is already fighting a battle that gets worse with every news cycle. Private investment in public equity (PIPE) investors have made it clear that they want a better deal. Lawsuits and regulatory probes have also pushed DWAC stock down.
In May 2022, InvestorPlace predicted that Truth Social would likely find itself unable to compete with Twitter. In the months since, that thesis appears to have been correct. The platform has watched its user count decline consistently. It certainly hasn’t helped that its app has been banned from the Google Play store. But even before that, Truth Social downloads were sharply declining.
The Bottom Line
As of now, Musk’s deal isn’t final — and we have seen him try to back out before. If it all works out, though, Truth Social will find itself up against an enemy with which it can’t compete.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.
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