I just realized one of my favorite things about Truth Social. It
has plenty of time to crash and burn before 2024. This is so solidly
structured to be a pump and dump it won't even matter if Truth Social
flys. Basically the current stock holders are gambling that the SPAC
will eventually be worth more than $17 billion in a market where
Twitter's market cap is $26 billion. Anything less and the current
investors lose money. After Truth Social crashes and burns it won't be
worth much. No big deal for the people who are only trying to show their support, but I'll bet that more than one poor fool loses their life's
savings.

https://realmoney.thestreet.com/investing/stocks/the-spac-acquiring-trump-media-isn-t-worth-buying-in-this-or-any-market-15932096

"The SPAC Acquiring Trump Media Isn't Worth Buying in This or Any Market Digital World Acquisition Corp. is trading at an absurd valuation and
its stock is likely to be whacked in coming months.

By BRAD GINESIN Mar 08, 2022 | 11:00 AM EST

This is not the right market in which to speculate on an
impossible-to-value stock with no earnings, scant revenue, uncertain
prospects and buyers solely focused on the company's celebrity appeal.
Yet people foolishly are buying one stock with these features: Digital
World Acquisition Corp. (DWAC) , the special purpose acquisition company
(SPAC) that is acquiring Trump Media & Technology Group. They are buying
the stock, which is trading at an absurd valuation, at precisely the
wrong time.

A few weeks ago, Trump Media unveiled its Twitter clone, Truth Social,
which was followed by a moment of excitement as the app raced to No. 1
in downloads. The initial enthusiasm quickly ran its course; now the
app's ranking has plummeted, with the media outlet seeing barely any
usage. This bodes poorly for the success of Truth Social and anyone
invested in Digital World Acquisition.

Former President Trump's prior post-presidential effort, "From the Desk
of Donald Trump," received minimal readership and shut down after 29
days. The status of his appeal is clearly in question.

Since the deal to acquire Trump Media was announced last October,
Digital World Acquisition has been highly volatile. Part of the
enthusiasm stems from the limited number of shares outstanding before
the deal closes, which has helped the stock trade at a frothy premium valuation. Once the deal is consummated, more than five times the
current shares will be free to trade, taking the market cap from $3.4
billion to more than $17 billion. Compare that steep valuation to
Twitter (TWTR) , with a $26 billion market cap and more than $5 billion
in revenues.

Even worse, investors in a PIPE (private investment in public equity)
have agreed to buy $1 billion in DWAC shares, free to sell immediately
when the deal closes. Buyers get to purchase shares at $33.60 or lower
if DWAC trades below $56. The PIPE deal hands these preferred investors
a minimum of a 40% discount to the market price with no lock-up
agreement. This ought to give pause to any buyer of free-trading stock.

An ongoing Securities and Exchange Commission investigation, announced
in December, is probing possible violations in connection with
consummating the deal as well as the trading of the stock. Like any deal
that hasn't officially closed, a risk remains that the SEC may uncover
an issue that delays or alters the closing process.

The current market environment is especially bad for speculating in an
unproven company at an unjustifiable valuation, with no revenue, that
attempts to compete with established companies. Plus, investors have
rightly shunned SPAC deals in general due to frothy valuations, high
cash burn rates and overly optimistic assumptions. Add to the mix that
Trump Media's management team has an unproven track record with a
product off to a shaky start.

Once the deal closes, a significant amount of shares will be free to
sell with a cost basis far below the current price. Investors are buying
into nothing more than hope and celebrity appeal - a bad combo as
overvaluation and froth are mercilessly rooted out in this market. The
stock will likely face significant losses in the coming months."

TB

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