DWAC: Trump's Truth Social SPAC Warns it Might Have to Liquidate

This latest press release by Digital World Acquisition Corp. (DWAC: NasdaqGM) confirms what we have been warning here in Wall Street Rebel; the company is a trainwreck in the making that will take its shareholders on another Trump financial collapse.

We've been recommending shorting by Digital World Acquisition Corp. (DWAC: NasdaqGM) here in Wall Street Rebel and two of our sister investment newsletters World Opportunity Investor and Strategic investment, for months. The special purpose acquisition company that agreed to take Trump Media and Technology Group public warned today that potential damage to former President Donald Trump's popularity could hurt his Truth Social and doom the merger.

DWAC is trading for about $30 a share, has less than $50,000 in cash, no profits, and faces as long as another year before its merger with Truth Social could possibly go through.

Yet, given the rising number of serious criminal investigations that could result in the indictment and conviction of former President Trump and literally dozens of his closest advisors, DWAC is making every effort to warn its shareholders, most of whom are Trump cultists, that they could lose every dollar they've invested in DWAC so if, instead when the SPAC is forced to close, it doesn't get sued by its shareholders for fraud, much in the same way Trump University experienced after its collapse.

On the same day, a Florida Magistrate let it be known it would be highly unlikely he intends to release any version of the Department of Justice used to secure a search warrant for classified, secret, and top secret documents at Trump's country club Mar-a-Lago DWAC released its warning in a securities filing that set a Sept. 6 shareholder meeting to determine whether to delay the deadline for completing a merger with Trump's firm, which owns the Truth Social app. DWAC also said it could liquidate if the merger isn't consummated.

The merger deadline is currently set at Sept. 8. The company looks to extend it by a year to Sept. 8, 2023. DWAC said in this filing…

"If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG's results of operations, as well as the outcome of the proposed Business combination, could be adversely affected,"

The number of criminal investigations that appear to be targeting the former president currently include…

• Those relating to the illegal removal, handling, and storage of classified, secret, and top secret records from the White House
• His involvement in setting off Jan. 6, 2021, Capitol riot and possible responsibility for the deaths and injuries suffered
• • An attempt to interfere with the work being done in Congress.
• The creation of phony electors to defraud the people of the United States
• NY City is prosecuting Trump Org. for criminal Income tax evasion and has secured a guilty please from its former CFO, who admitted to 15 years of tax fraud.
• Despite the fact that New York State Attorney General Letitia James has filed a civil lawsuit against the Trump Organization, the state could STILL file criminal charges against Trump and his three oldest children for criminal wire fraud, tax fraud, and a long list of other felonies despite the fact that James is suing the Trump Organization.

Trump initially launched Truth Social after he was banned from Twitter over his tweets on the day of the insurrection.

DWAC said in its SEC filing that it is worried the deal's value could be affected by damage to the former president's reputation. It avoided the obvious. DWAC, at $30 a share, has a $1.1 billion (yes billion) valuation and shows just $41,000 in cash and $300K in debt. If it shutters, how much money will each shareholder get? The answer is… zero.

We recommend shorting another 1000 shares of Digital World Acquisition Corp. (DWAC: NasdaqGM) and predict that in the next 12 months, the bottom will fall out of DWAC, i.e., 1000 shares should generate a $28,000 profit even with the cost of borrowing shares and paying the interest. Buying options is too expensive as the option market makers know DWAC is a bankrupcy. Selling call options naked might produce profits, but it's risky, leaving borrowing DWAC shares and selling them short as the best play.

Still, think Trump walks on water? Still drinking the Kool-Aid?

The DWAC SEC filing also cited surveys that indicated demand for Truth Social might be limited….

 "According to The Hill, only 30% of people surveyed would use a social media site associated with President Trump. In addition, according to a survey published in The New York Post, only 60% of Republicans would use such a platform."

Trump Media and Technology Group didn't immediately respond to a request for comment on DWAC's filing by CNBC and other financial media. A call to Patrick Orlando, CEO of DWAC, went to voicemail.

DWAC, in pushing for the deadline extension, also cited the ongoing Securities and Exchange Commission and Justice Department investigations into its deal with Trump Media.

"Our failure to obtain regulatory approvals in connection with the Business Combination or to resolve certain ongoing investigations within the requisite time period may require us to liquidate."

One last thing that should concern any shareholder of DWAC is the increasingly violent postings on Truth Social calling for the murder of FBI agents, members of the grand juries, judges, and Democratic members of Congress. If manifested into violence, murder could trigger billions of dollars in civil lawsuits against DWAC and Truth Social.

                       The GOP Doubles Down On Anti-Law Enforcement Rhetoric Amid Surging Threats

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