Digital World Acquisition Corp. (DWAC) Shares Tumble as Elon Musk Vows To Reverse the “Flat Out Stupid” Decision To Evict Trump From Twitter
Digital World Acquisition Corp. (NASDAQ:DWAC), a SPAC that is slated to take the Trump Media & Technology Group (TMTG) public, is facing pressure today from Musk's latest Twitter-related comments even as the broader market is green.
To wit, the CEO of Tesla has stated in an interview that he would reverse the "morally bad" and "flat out stupid" decision to evict Trump from Twitter (NYSE:TWTR):
— Benny Johnson (@bennyjohnson) May 10, 2022
Bear in mind that Musk intends to take Twitter private in a $43 billion takeover deal. Moreover, the CEO of Tesla is also expected to act as the interim CEO of the social media giant once the deal achieves financial closure.
Of course, Musk has positioned himself as a champion of freedom of speech on online platforms. While explaining his rationale behind the Twitter takeover deal in a letter sent to the social media giant's board, Musk had noted:
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.
However, since making my investment, I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company."
So, why are DWAC shares in the red today? Well, the SPAC is slated to merge with TMTG – the entity behind Trump's TRUTH Social platform. Trump has positioned TRUTH Social as the platform of choice for conservative-leaning online voices. However, if Twitter under Musk's leadership manages to rope in Trump, the entire raison d'etre' behind the TRUTH Social initiative loses its luster.
While Trump has previously stated that he would not move back to Twitter, the rollout of the TRUTH Social app has not exactly been smooth sailing so far, with the app continuing to face issues around a slow rollout. Moreover, the SPAC merger also faces material risks. For instance, DWAC has already received a "voluntary information and document request" from the SEC, which included a demand for documents related to meetings of DWAC's board of directors as well as policies and procedures relating to its interactions with TMTG, based on reports that DWAC "may have committed securities [law] violations by holding private and undisclosed discussions about the merger [with TMTG] as early as May 2021, while omitting this information [in SEC) filing and other public statements." If the situation worsens, Trump might find it more expedient to jump off this sinking ship and move to Twitter.
Do you think Musk is justified in taking an absolutist view around freedom of speech? Let us know your thoughts in the comments section below.
Wccftech Finance strictly adheres to political neutrality. Any reference to former President Trump or the SPAC Digital World Acquisition Corp. does not mean that we support or oppose his policies. This is purely a financial post featuring objective analysis.