DWAC Stock: Will Trump's Social Media SPAC Climb Or Crash?

Seeking Alpha2021-10-25

Summary Sentiment and Blue Sky potential are driving DWAC’s share price, and sentiment is a pretty poor factor for forecasting long-term performance. But during a cycle of herd intensity, it has the ...

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精彩评论

Kamarulzaman
2021-10-26
Kamarulzaman
Good job sir. Thanks you
JeremyKok
2021-10-26
JeremyKok
Sell short if there are signs of it falling. Not a long term hold stock.
CCCH
2021-10-25
CCCH
Could be climbing up
SlowNana
2021-10-25
SlowNana
[Doubt]
HENRYCSC
2021-10-25
HENRYCSC
🚀
SamYYL
2021-10-25
SamYYL
Like
- 滚股怪:
  Ya

发表看法

150

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But during a cycle of herd intensity, it has the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4461606-dwac-stock-donald-trump-social-media-spac-climb-crash\">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/4461606-dwac-stock-donald-trump-social-media-spac-climb-crash","article_id":"1163651002","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1163651002","pubTimestamp":1635131314,"columns":[],"sourceInfo":null,"weMediaInfo":null,"summary":"Summary\n\nSentiment and Blue Sky potential are driving DWAC’s share price, and sentiment is a pretty ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"DWAC股票：特朗普的社交媒体SPAC会攀升还是崩溃？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DWAC":0.9},"content_text":"Summary\n\nSentiment and Blue Sky potential are driving DWAC’s share price, and sentiment is a pretty poor factor for forecasting long-term performance. But during a cycle of herd intensity, it has the potential to rocket a stock. Even George Soros would partake, \"When I see a bubble forming, I rush in to buy, adding fuel to the fire\".\nHere is a list of Meme and SPAC stocks on our Portfolio Tool to show performance. We also offer stocks screened by Seeking Alpha for solid fundamentals and quant scores.\nDWAC and most other Meme stocks and SPACs are very risky: They are being driven not by fundamentals or quantitative metrics but by short-term (daily) sentiment.\nIf you want to rest easy, with a time horizon beyond one trading day, our Top Stocks screen gives you stocks with excellent fundamentals and quantitative metrics.\n\nGearstd/iStock via Getty Images\nThe newest flavor of the month is hot stock Digital World Acquisition Corp. (DWAC), the SPAC merging with Donald Trump's new and public social-media platform. Established via Special Purpose Acquisition Company (SPAC), a buying frenzy has taken DWAC from $10/share to over $130/share, following a deal announced on October 20, 2021. Trump Media & Technology Group will combine with DWAC to launch a new social network called TRUTH Social, a deal valuing the media company at approximately $875 million.\nDWAC lacks fundamentals because it has no revenues or earnings - like all SPACs, it is a shell company established to raise capital through IPO. Like meme stocks, SPACs thrive on investor craze and are often driven by FOMO (fear of missing out). It is a real thing! So, as the Head of Quantitative Strategy at Seeking Alpha, sentiment is certainly among the data points I monitor.\nFor those of us who are inclined towards long-term investing, however, sentiment is a pretty poor predictor of long-term price performance. Fundamentals do matter. And from a valuation perspective, SPACs - like meme stocks - are risky investments. The difference is meme stocks are viewed as emerging growth stocks from dying industries, but at least they have a track record, history, and fundamentals. SPACs are not profitable on the opposite end because they are newly formed and have no operating history. But SPACs are all the craze because they are new and forward-thinking companies establishing cutting-edge offerings, businesses, and business models.\nMany SPACs form without an underlying company. They are private equity-backed IPOs that can circumvent the traditional IPO process in a low-cost expedited fashion and require less syndication from investment banks; they tend to ride the wave of more of a high-flying IPO than meme stocks. Once a SPAC prices its stock, they typically list at $10, as evidenced by DWAC.\nMany investors believe all meme stocks and SPACs will go to the moon when they actually follow the trajectory of a recent flight to space conducted by a former SPAC, Virgin Galactic (SPCE), which only lasted about 12 minutes. SPACs may have their day in the sun now; they're usually short-lived! It's a cautionary tale of why sentiment, and the stock momentum it produces, need to be balanced with other factors of long-term performance: value, growth, profitability, and analyst estimates. This is the lens we'll apply to meme stocks and SPACs in this article, to fairly gauge the opportunities here.\nMeme and SPAC Stocks: Speculative Euphoria and Emotion as Drivers?\nAny investor or trader in a stock driven by strong sentiment needs to know it is a gamble and that the risk is high. Many years ago, the economist Hyman Minsky proposed a theory that suggests that stability is destabilizing. During economically prosperous times, there's a state of speculative euphoria that spreads through groups of investors. After taking profits, they create their seeds of destruction by risk-taking, creating financial instability or panic and crisis.\nNevertheless, people always say this time is different. Hence, sentiment and herding remain one amazing driver of stock price performance. Many of the Meme and SPAC stocks listed below were driven by emotion at some point. Should individuals choose to invest in any of the stocks, they need to recognize it is a bet similar to that made in a casino.\nInvestors that want to rest easy, and desire a time horizon beyond a single trading day, can find stocks with excellent fundamentals and quantitative metrics on our Top Stocks By Quant screen. The screen is updated every day and is grounded in the recommendations of SA Quantitative metrics. Our Very Bullish Quant recommendations are up YTD 46.81% compared with the S&P 500, up 24.29%.\nSource: S&P Cap IQ and Seeking Alpha.\nSentiment can be viewed as a single financial factor. Sometimes single factors work great - until they don't. The \"don't\" is one of the reasons we use a multi-faceted and multi-factor approach to our quantitative algorithms. Years of experience managing money for a hedge fund and a proprietary trading desk have taught me that putting all your eggs into a single investment theme is very dangerous over a long period. We do not want to get pigeonholed when investors' irrational exuberance for the month's factor turns into fervor for another element. When the investment cycle on a factor turns, investors can take a beating.\nInstead of focusing on a single metric, sentiment, we blend investment metrics based on value, growth, profitability, earnings, and momentum. This balanced approach has worked very well over the long term, as seen in the graph below.\nBelow is a table of 15 meme stocks and 15 SPACs showing how much they have traded off from peak sentiment levels. While euphoria and huge gains may draw in investors, the table below depicts that with meme stocks comes volatility and huge gains quickly wiped out.\nMeme Stocks Fall Hard From Highs\n\nMeme stocks do not offer strong growth, and the valuation framework is weak. While their prices may appeal to investors, these beaten-down stocks have negative fundamentals. The pump-and-dump price manipulation has taught many investors to invest in stocks with the best investment characteristics of growth, profitability, value, momentum, and rising analysts' earnings estimates.\nSA Ratings And Grades On Meme Stocks\n\nAs we witnessed earlier in the year, SPAC mania took a plunge. When prices skyrocket quicker than the fundamentals can explain, investors get nervous. David Solomon, Chief Executive of major SPAC underwriter Goldman Sachs,warned earlier this year that the boom is not \"sustainable in the medium term.\" If you don't believe it, Here's a look at several SPAC stocks off from their 52-week highs.\nWill Trump SPAC Shares Decline As Others Have Fallen?\n\nSeeking Alpha's Quant Ratings and Factor Grades\nSeeking Alpha's Quant Ratings Factor Grades provide investors with an instant characterization of each stock. This makes it easy to find or rule out stocks based on your investment criteria. Below is an example of how the Quant Factor Grades, overall rating, and Quant Ranking within the relevant sector are displayed.\nSource: Seeking Alpha Premium\nTop Rated Stocks by Quant look strong and are recommended by our Quant team, Seeking Alpha Authors, and Wall Street and have good grades on fundamental factors. With a proven backtested track record, our Quant Ratings, which refresh daily, beat the market. The suggestions below are derived from a model that selects very bullish quant recommendations from a sophisticated trading algorithm. As shown above, from January 4, 2010, to June 30, 2021, our very bullish Quant Stocks have beaten the S&P 500 index by 1755% vs. 379%.\nSA Top Rated Stocks By Quant\nSource: Seeking Alpha\nConclusion: Volatility vs. Upside\nMeme stocks and SPACs are risky and prone to wild and volatile swings centered around rumors and social media message boards like Reddit and Twitter. Primarily traded by retail investors looking for a quick trade, there's little regard for quant grades, investment metrics, or a company's fundamentals. The only real commonality is the power of retail investors to drive up market prices. When you look at meme stocks this past year, the performance was driven by a combination of retail sentiment sticking it to Wall Street and surmounting an attack against hedge funds shorting said Meme stocks, resulting in a short squeeze, and it is unclear if this is the case with DWAC, Trump's new social media SPAC.\nWhether holding long or short positions with high levels of short interest surrounding securities, investing in those stocks is risky. As I mentioned in a GameStop article earlier this year, \"The risk is so great that many traders will not carry the positions overnight and look to reestablish positions each morning. When investing in these stocks, one of Wall Street's oldest adages comes to mind. Bulls can make money. Bears can make money. Pigs get slaughtered.\"","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":856413993,"gmtCreate":1635206970052,"gmtModify":1635209608164,"author":{"id":"4097645376190010","authorId":"4097645376190010","name":"Kamarulzaman","avatar":"https://static.tigerbbs.com/fdd904f47ea24aec7b14f7a88bfdd544","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"4097645376190010","idStr":"4097645376190010"},"htmlText":"Good job sir. Thanks you","listText":"Good job sir. Thanks you","text":"Good job sir. Thanks you","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/856413993","repostId":1163651002,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":856545166,"gmtCreate":1635205000179,"gmtModify":1635205005887,"author":{"id":"3567307840510045","authorId":"3567307840510045","name":"JeremyKok","avatar":"https://static.tigerbbs.com/01b03a485f83b6b2615fad8ac9b87bf4","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"3567307840510045","idStr":"3567307840510045"},"htmlText":"Sell short if there are signs of it falling. Not a long term hold stock.","listText":"Sell short if there are signs of it falling. Not a long term hold stock.","text":"Sell short if there are signs of it falling. Not a long term hold stock.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/856545166","repostId":1163651002,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":856106898,"gmtCreate":1635157275858,"gmtModify":1635157276219,"author":{"id":"3579259217271611","authorId":"3579259217271611","name":"CCCH","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3579259217271611","idStr":"3579259217271611"},"htmlText":"Could be climbing up","listText":"Could be climbing up","text":"Could be climbing up","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/856106898","repostId":1163651002,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":856388193,"gmtCreate":1635151057674,"gmtModify":1635151313422,"author":{"id":"3586490126059662","authorId":"3586490126059662","name":"SlowNana","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":6,"crmLevelSwitch":0,"authorIdStr":"3586490126059662","idStr":"3586490126059662"},"htmlText":"[Doubt]&nbsp;","listText":"[Doubt]&nbsp;","text":"[Doubt]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/856388193","repostId":1163651002,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":856971859,"gmtCreate":1635147055285,"gmtModify":1635147056122,"author":{"id":"3575091428590185","authorId":"3575091428590185","name":"HENRYCSC","avatar":"https://static.tigerbbs.com/6d47a6dec25b21dc547a5b982674c499","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3575091428590185","idStr":"3575091428590185"},"htmlText":"🚀","listText":"🚀","text":"🚀","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/856971859","repostId":1163651002,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":856954400,"gmtCreate":1635145179840,"gmtModify":1635145180461,"author":{"id":"4089205014499330","authorId":"4089205014499330","name":"SamYYL","avatar":"https://static.tigerbbs.com/c38b79dfd54364065e7068bc7e80dc9f","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"4089205014499330","idStr":"4089205014499330"},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/856954400","repostId":1163651002,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":6317905,"gmtCreate":1635154327993,"gmtModify":1635154328036,"authorId":4091089381144950,"author":{"id":4091089381144950,"idStr":"4091089381144950","authorId":4091089381144950,"name":"滚股怪","avatar":"https://static.tigerbbs.com/b67621b4133ca0db91bff9766152a448","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":856954400,"type":1,"supId":0,"prevId":0,"content":"Ya","text":"Ya","html":"Ya"}],"langContent":"CN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":150,"commentSize":29,"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":"4.29.4","shortVersion":"4.29.4","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/1163651002"}