DWAC Stock: Still Highly Speculative

Seeking Alpha2022-01-17

SummaryTMTG and DWAC chose to launch their social media platform, Truth Social, on a day commemorating Presidents on 21 February 2021.Upon launch, we expect many to subscribe to Truth Social due to ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDWAC Stock: Still Highly Speculative\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-01-17 19:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4479816-dwac-stock-still-highly-speculative><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryTMTG and DWAC chose to launch their social media platform, Truth Social, on a day commemorating Presidents on 21 February 2021.Upon launch, we expect many to subscribe to Truth Social due to ...</p>\n\n<a href=\"https://seekingalpha.com/article/4479816-dwac-stock-still-highly-speculative\">网页链接</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://seekingalpha.com/article/4479816-dwac-stock-still-highly-speculative","article_id":"1104014342","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1104014342","pubTimestamp":1642419192,"sourceInfo":null,"weMediaInfo":null,"summary":"SummaryTMTG and DWAC chose to launch their social media platform, Truth Social, on a day commemorati","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"DWAC股票：仍然高度投机","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DWAC":0.9},"content_text":"SummaryTMTG and DWAC chose to launch their social media platform, Truth Social, on a day commemorating Presidents on 21 February 2021.Upon launch, we expect many to subscribe to Truth Social due to the speculation surrounding former President Trump. Nonetheless, the platform needs to prove itself to sustain long-term growth.TMTG partnered with Rumble, an alternative online video platform with minimal restrictions, for video and streaming services for Truth Social.We are also uncertain about Devin G. Nunes' appointment as the CEO of TMTG as he lacks the necessary experience in the media or technology industry.We discuss whether investors should add DWAC stock now.akinbostanci/E+ via Getty ImagesInvestment ThesisIn October 2021, Digital World Acquisition Corp. (DWAC) announced its merger with former President Trump's media company, Trump Media & Technology Group. The company plans to launch its new social media platform, Truth Social, by February 2022, to compete with Big Tech companies such as Facebook and Twitter. The Capital Riot in January 2021 led to former President Trump's account suspension from the respective Big Tech companies, which has been described by many as \"a tyranny of Big Tech.\" As a result, Truth Social aims to be the alternative social media for conservatives within the US, to cancel \"cancel culture\" in the media industry.We discuss whether investors should add DWAC stock now.The Motivation Behind The Truth Social And TMTG+It is no coincidence that former President Trump chose to launch his new social media platform, the Truth Social by Trump Media & Technology Group, on 21 February 2022.21 February (the third Monday every February) is a federal holiday initially meant to celebrate George Washington's birthday, the first President of the United States. However, Presidents' Day is now widely accepted to celebrate all US Presidents, past and present. In January 2021,former President Trump lost his \"megaphone\"on Twitter, Facebook, and Youtube after the Capital Hill riot on 6 January 2021.Tech Monopoly Censorship. Source: TMTGIn July 2021, former President Trump initiated a lawsuit against Twitter, Facebook, and Google, while commenting that, \"if they could ban a President, they can do it to anyone.\" It also forms the basis for his new social media platform, \"to counter this liberal bias and dangerous exercise of tech monopoly censorship.\" The Truth Social aims to provide an inclusive “Big Tent” Approach for \"an open, free, and honest global conversation without discriminating against political ideology.\"Nonetheless,posts seeking to tarnish either Truth Social or Trump Media & Technology Group will still be off-limits according to its terms of service. As a result, it is evident that the site will not accommodate former President Trump's long-term critics.Potential Subscriptions. Source: TMTGNonetheless, with a total of 146M Trump followers on Twitter, Facebook, and Instagram (prior to account suspension and assuming overlapping subscription by the same person), we expect a similar following to the Truth Social and TMTG+ upon launching, mainly due to the public's interest in former President Trump after a year of \"radio silence.\" Nonetheless, we are unsure how TMTG plans to fund the social media company moving forward. Typically, most social media platforms such as Facebook and Instagram rely on advertisers for revenue. The other option for TMTG+ would be from recurring subscription fees, similar to Youtube Premium at $11.99 or Netflix at $13.99 every month. Assuming similar fees at $10 every month, we could be expecting up to $1B of monthly revenue at its peak. Nonetheless, in its Investor Presentation on November 2021, the company has guided 10M subscribers for TMTG+ and 15M monetizable users in the Truth Social. It would account for annual revenue of $1.2B, assuming similar subscription fees.Though little details have been released regarding its subscription-streaming service, TMTG+ aims to be an alternative to Disney+, Netflix, and CNN, providing news, podcasts, entertainment, documentaries, and sports programming. In addition, on December 2021,TMTG reported that it has partnered with Rumble for video and streaming services for Truth Social. Rumble is an online video platform popular with US conservatives who seek an alternative to Alphabet-owned Youtube. It is evident that TMTG chose Rumble as its partner, as both management hold similar values. Chris Pavlovski, CEO of Rumble, said:Rumble was developed for dedicated content creators who are being stifled elsewhere. Rumble will never censor political discussion, opinion or act like the arbiters of Truth. (The Conversation)Furthermore, on 6 December 2021,Congressman Devin G. Nunes was confirmed as the CEO of TMTG. Since the former President took office, Devin Nunes has been an outspoken ally of former President Trump, who has awarded Nunes with the Medal of Freedom in 2021. Nunes previously also served as chairman of the House Intelligence Committee during the Russia investigation from the FBI, showing his firm tenacity in defending former President Trump during the legal proceedings. Though he holds the same ideology as former President Trump, we are not sure how it may aid Nunes in his CEO career as he had no prior experience in the media or technology industry. Devin Dunes, CEO of TMTG, said:The time has come to reopen the Internet and allow for the free flow of ideas and expression without censorship. The United States of America made the dream of the Internet a reality and it will be an American company that restores the dream. I'm humbled and honored former President Trump has asked me to lead the mission and the world-class team that will deliver on this promise. (NPR)The Economics of TMTG And Format Of Truth SocialTMTG valued the company at $875M, potentially increasing to $1.7B in cumulative valuation. Given the massive interest surrounding the launch of Truth Social, we expect a massive influx of followers in the early days. However, its long-term success will depend on the user experience, the stickiness of the followers, and mainly the content within the social media platform. We can expect many to follow the social media if the content is sufficiently relatable to the fans of former President Trump and the conservative group. Furthermore, we expect additional groups of followers from those seeking the alternative social media compared to the Big Tech. As a result, we expect TMTG to reach its full potential at $1.7B due to the performance of its stock post-merger.In addition, DWAC has risen almost seven-fold from the initial IPO price of $10 on 30 September 2021 to $70.88 on 14 January 2022, after a market correction from its highest point at $94.2 on 22 October 2021. As a result, we can surmise that there will still be substantial interest from investors, especially leading to the launch of Truth Social in February 2022 and TMTG+ moving forward. As a result, we expect healthy growth for TMTG in the early days of launch, with ample funding of $293M from DWAC.Screenshots of Truth Social. Source: Apple App Store.From the screenshots of Truth Social in the Apple Store, we can potentially expect a similar format to Twitter and Plurk, leaning more towards the text form of social media. It is no wonder as Twitter has been former President Trump's favorite form of social media prior to the account suspension, with 23.2K tweets or retweets from 2018 to 2020. Nonetheless, it remains to be seen if Truth Social can achieve long-term success after the hype surrounding the social media and former President Trump dies down.So, Is DWAC A Buy?The potential ahead for DWAC and TMTG is highly speculative as little has been divulged on the potential services of TMTG+ and the format of Truth Social. The streaming service is rather crowded now, with many Big Tech companies, such as Netflix, Hulu, HBO, Disney, Amazon, and others offering similar products. Furthermore, social media is highly competitive, with Facebook, Instagram, TikTok, Twitter, and others proliferating the market.Moreover, the stock price is volatile and susceptible to speculations whenever momentum spikes. Investors who add now are expecting that the company can successfully deliver strong growth and robust revenues in the next few years, despite intense competition. Nonetheless, speculative investors can still invest in DWAC if they believe in the massive drawing factor of former President Trump.Therefore, we rate DWAC stock at Neutral.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":697698454,"gmtCreate":1642429080104,"gmtModify":1642429080736,"author":{"id":"3575420754880245","authorId":"3575420754880245","name":"55f64d08","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0},"htmlText":"K","listText":"K","text":"K","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/697698454","repostId":1104014342,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":7185919,"gmtCreate":1642429085299,"gmtModify":1642429085406,"authorId":3575420754880245,"author":{"id":3575420754880245,"authorId":3575420754880245,"name":"55f64d08","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":697698454,"type":1,"supId":0,"prevId":0,"content":"<u>K</u>","text":"<u>K</u>","html":"<u>K</u>"}],"langContent":"CN"},{"id":697698208,"gmtCreate":1642429067676,"gmtModify":1642429068168,"author":{"id":"3575420754880245","authorId":"3575420754880245","name":"55f64d08","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0},"htmlText":"K","listText":"K","text":"K","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/697698208","repostId":1104014342,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":5,"commentSize":2,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":false,"deviceId":"web-server-community-laohu8-v3","version":"4.25.1","shortVersion":"4.25.1","platform":"web","vendor":"web","appName":"laohu8","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1104014342"}