Shares of special-purpose acquisition company Digital World Acquisition Corp. DWAC fell sharply in premarket trading on Wednesday.
Digital World has an agreement in place to merge with Trump Media and Technology Group, which owns the Truth Social platform, to bring the latter public.
The stock’s plunge is despite Donald Trump emerging victorious in the New Hampshire Republican presidential primary, pocketing the second state after Iowa. The pullback fits in the classic ‘buy-the-rumor, sell-the-news” move.
The stock soared over 88% on Monday and tacked on another 2%+ on Tuesday in anticipation of a Trump victory. It was also reacting to an amendment to an S-4 statement it filed with the SEC in September 2023 that suggested that the potential combination is on track.
With the New Hampshire primary election results out now, the stock is apparently digesting the gains.
The SPAC merger between Digital World and TMTG has long been delayed due to regulatory scrutiny and the failure of the former’s management to convince shareholders to vote in favor of a union.’
In premarket trading, the stock fell 8.02% to $46.68, according to Benzinga Pro data.
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