If you’re considering investing in a company within the social media industry, DWAC– the company planning to take Trump Media and its Truth Social platform public – may be the right choice for you. This guide will analyze the most important facts about the SPAC company, as well as explain how to buy DWAC stock. In addition, we will go through the risks involved in trading the stock and provide you with an overview of the best brokers to use.
What is DWAC?
On November 22, 2022, the company approved extending the Trump Media merger deadline to September 2023. In fact, DWAC has pushed back the merger with TMTG four times. If support for extending the merger were less than 65%, the company would have been forced to liquidate, meaning that all the money raised from the initial public offering (IPO) would have been given back to investors.
It’s worth noting that the merger faces additional legal challenges. Both the Securities and Exchange Commission (SEC) and federal criminal investigators are probing the Trump Media-DWAC deal.
What is a SPAC?
A SPAC is a shell company without commercial operations established to raise capital through an initial public offering to acquire or merge with another business. In fact, the only tangible asset is the capital from the IPO.
The funds raised in an IPO are allocated to an interest-bearing trust account that will be paid out only to complete an acquisition or to return the funds to investors if the SPAC is liquidated (if the acquisition isn’t completed within two years).
After a merger is completed, investors in the SPAC can choose to convert their shares into shares of the newly merged company. Or, they can redeem their SPAC shares to get back their original investment plus any interest accrued while the money was in trust.
DWAC IPO: when did DWAC go public?
DWAC became a publicly-traded company through an IPO in September 2021, listing 25 million shares at an initial price of $10.
On October 20, 2021, TMTG and DWAC announced that they had entered into a definitive merger agreement that would combine the two entities, allowing TMTG to become a publicly-traded company. However, as mentioned above, the merger deadline has been postponed to September 2023.
The stock symbol for DWAC is DWAC, and it trades on the NASDAQ exchange. You can purchase DWAC stock through multiple brokers, which we will briefly explore later in this guide.
Step-by-step process on how to buy DWAC stock
DWAC is a publicly traded company, meaning you can buy DWAC stock through a broker. The steps involved in purchasing DWAC shares are outlined in the following section in detail.
Step 1: Choose a broker
To buy DWAC stock online, you’ll need a brokerage account. Several platforms are available, but the right one will depend on your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products such as options). When evaluating brokers, consider the following features:
- Fees: Brokerage fees is a type of fee collected by brokers to execute your transactions or provide specialized services. However, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
- Security: Pick a reliable broker by ensuring it is fully licensed by state regulatory authorities as well as FINRA and registered with the SEC;
- Trading tools: Active traders may want more out of their brokerage accounts. Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s usually a good idea to look for an easy-to-use platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: You should search for a platform that gives you access to solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares allow investors to buy stock or ETFs by the dollar amount instead of the number of shares; particularly helpful for investors who don’t have limited capital but want to build a diversified portfolio or are looking to set up a dollar-cost averaging strategy.
Also, traders can opt for online, full-service brokers or discount brokers, as well as robo-advisors.
DWAC stock: where to buy?
Access to the financial markets is easy and inexpensive, thanks to various online brokers. However, choosing the right broker optimized for your needs (investing goals, educational tools, trading style) is paramount for a successful trading experience.
To securely invest in DWAC and buy DWAC stock, consider these brokers:
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Intermediate Traders and Investors
- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
Low cost investing
Step 2: Fund your account
Once you have selected a broker, the next step is funding your trading account. Remember, it can sometimes take up to three days for the funds to be deposited.
Step 3: Research the company
When investing your money in the market, doing your research is crucial. If you want to buy DWAC stock, keep an eye on price data, overall valuation, and company announcements, particularly regarding the merger or updates on the investigation by the SEC or relevant political news, as well as any statements, tweets, or dealings by Trump.
Because DWAC is a SPAC, it does not have an operating history to review. However, interested investors should evaluate the business background of DWAC’s management. The best place to start your research on a stock is its public filings with the SEC. Fortunately, you can access DWAC’s SEC filings easily through its website. This includes quarterly and annual reports, a code of ethics, as well as recent press releases.
Step 4: Decide how much you want to invest
After you’ve done your research and determined that DWAC stock is the right choice for you, you’ll need to decide how much you want to invest.
The amount of money you invest ultimately depends on the price and number of shares you want to buy. If the share prices of stocks you’re interested in are financially out of reach, you can also explore fractional shares. Fractional shares allow you to purchase a portion of a stock instead of the full share.
Because investing can have unpredictable returns, it’s crucial only to invest what you can afford to lose and to be mindful of your risk appetite.
Step 5: Place your order and buy DWAC stock
Once you decide on the number of shares or the dollar amount you’d like to purchase, you can place your order. If you’re working with an advisor, tell them you’d like to buy DWAC stock and how much you can invest, and they’ll do it for you. If you’re using a brokerage account, simply log in and enter the ticker, DWAC in the search bar.
There are a few different execution options to choose from, including:
- Market order: A market order is an order to buy the stock at the current market price that is generally executed immediately (subject to availability);
- Limit order: A limit order is processed once the stock reaches your specified price. For example, imagine you want to buy DWAC stock at $20 or lower. You would then set the limit price at $20, and the order will only execute when the stock reaches the set price or lower;
- Options contract: Options speculation allows for leveraged positions in a security at a fraction of the cost of the underlying asset. A call option allows the trader to profit if the price of the stock increases, and a put option enables them to profit if the stock price declines. Derivative products can only be traded on a margin account, which typically has higher minimum balance requirements than standard brokerage accounts.
Step 6: Monitor your investment
Monitoring news surrounding the merger is paramount as the success of the Trump Media Technology Group immensely influences the DWAC stock. If the merger goes through, DWAC shareholders will become shareholders of TMTG, giving them a direct stake in Trump’s media company. However, DWAC’s stock price would likely tumble if the merger falls through or is delayed.
As the founder of TMTG, Donald Trump’s personal and political undertakings have significantly impacted DWAC stock. For example, the DWAC share price surged to $29 following rumors that the ex-President would be running for president in 2024. However, surprisingly, once he did announce his third bid for the White House, DWAC stock saw a 16% drop in price. Therefore, if you’ve invested in DWAC, staying up-to-date with the latest news and controversies surrounding Trump is wise.
Furthermore, investors should keep themselves informed on any federal regulatory investigations that could negatively affect the company, such as the alleged illegal discussions between DWAC and TMTG prior to going public. Or the fallout from a Trump Media executive’s whistleblower complaint to the SEC alleging that the company relied on “fraudulent misrepresentations … in violation of federal securities laws.”
Since Trump Media’s flagship product– Truth Social– holds much power over the DWAC stock, keeping tabs on its trajectory is crucial. You may also want to track the performance of Twitter and other social media and media platforms to gauge the industry’s health as a whole.
Should I buy DWAC stock?
Since DWAC is a SPAC, merger news and other announcements surrounding TMTG are much more critical than financial fundamentals. That being said, investors should still utilize technical analysis to make more informed decisions about when to buy or sell the stock. By looking at price trends and chart patterns, they can better understand where the company is headed.
This gauge displays a real-time technical analysis overview for your specified timeframe. It can be a valuable technical analysis tool for many traders by simplifying trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in stocks
Mistakes are expected when investing in stocks but can be avoided if you recognize them. For an in-depth guide on investing mistakes, we have compiled a list of 17 common mistakes and tips for preventing them. But, for now, let’s list some of the most typical ones:
- Not performing your due diligence on the stock;
- Having unclear financial goals;
- Attempting to time the market;
- Failing to diversify;
- Letting your emotions rule the investment decision-making process.
How to sell DWAC stock?
You can sell DWAC stock if you see the company performing differently than you’d expected or if you’ve reached the financial goal you set when you first invested in the company.
If you’re working with an advisor, they can create a sale order for you. However, if you have your own broker account, you can simply log on, navigate to the stock’s detail page, input the number of shares or dollar amount you want to offload, and tap sell.
Pros and cons of buying DWAC stock
Given the inherent riskiness of DWAC as a SPAC stock, as well as the ongoing SEC investigation, investors should be aware that investing in DWAC is a high-risk endeavor. But on the other hand, stocks with a higher risk can also lead to greater rewards.
So, now that we’re familiar with DWAC and how to buy its stock, let’s explore both the pros and cons of investing in it.
- Truth Social is a hit with users: Despite the scalability issues plaguing TMTG’s flagship product and problems with the roll-out, the app is highly rated, boasting an average rating of 4.5/5 on the App Store;
- Trump is standing by Truth Social: Even though Trump has been invited to rejoin Twitter, he seems dead-set on staying with his own social networking app. Only the future will tell if Trump’s stance changes, but for now, Truth Social is still benefiting from having him as their figurehead.
- Liquidation risk: DWAC is not immune to the obstacles faced by all SPAC stocks. If the merger doesn’t go through, the company will be forced to return all capital to shareholders;
- Scrutiny from regulatory bodies: The SEC’s investigation into DWAC is scaring potential investors, who believe an unfavorable ruling would make the company worthless. For example, the company lost $138.5 million out of the $1 billion in financing raised from private investors in public equity (PIPE);
- Price volatility: Regardless of how you feel about him, Trump is the face of TMTG and therefore has a sizable influence on DWAC stock. So, given Trump’s penchant for controversies and impulsive behavior, the stock is expected to suffer under considerable volatility;
- No dividends: DWAC does not pay dividends to its stockholders.
DWAC is a special purpose acquisition company that raises funds for Trump Media Technology Group, a social media company led by Donald Trump. If you’re considering investing in DWAC, it’s crucial that you read up on all relevant announcements and news stories about the merger, TMTG, as well as Donald Trump. As always, remember to do your own independent research and have solid risk management tools in place before entering the market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about DWAC
What is DWAC?
DWAC is a special purpose acquisition company or SPAC created to provide initial funding for Trump Media Technology Group (TMTG) and eventually take them public. If the merger (postponed to September 23, 2023) goes as intended, all DWAC investors will become shareholders of TMTG.
How to buy DWAC stock?
DWAC became a publicly traded company in September 2021, and its stock is available on the NASDAQ exchange under DWAC, which means you can buy shares of DWAC through your brokerage account.
Is DWAC stock a buy?
When considering if DWAC is a good investment for you, factor in your risk tolerance, the size of your current portfolio, what you hope to gain financially from this venture, and how comfortable you are with the current market conditions.
Where can I buy DWAC stock?
You can buy DWAC stock at various online brokers such as eToro, Revolut, Interactive Brokers (IBKR), Degiro, and Robinhood.
How much is DWAC stock?
The current (as of December 1, 2022) DWAC stock price is hovering around $22, a 120% increase from the stock’s IPO price of $10.