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In reply to the discussion: I'm sorry, but I need someone to explain it to me [View all]LetMyPeopleVote
(145,839 posts)50. DWAC soon to be TFG is a meme stock that relies on the greater fool/idiot theory
Meme stocks rely on the greater fool theory. I was amused to see that DWAC/Trump Media is classified as a meme stock where the value is due to personality and not due to the real value of issuer of the meme stock. This article is a good discussion of the meme nature of DWAC/TMT.
https://www.vanityfair.com/news/donald-trump-truth-social-media-merger
Trumps financial future now hinges on some of the strangest fads in corporate financememe stocks, SPAC deals, and cult-of-personality investing. If Trump can find a way to act fast, it might just be the bailout he desperately needs.
Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. Its chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. Thats the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......
DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way thats significantly divorced from the reality of their underlying business. Combine those two trends and youll start to see why Trumps media company could be valued at roughly $9 billion if it merges with DWAC.
Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the greater fool theory of investing, meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. Here youve got ideology involved [too]as far as I can tell, the vast majority of DWAC investors are Trump political investors, and theyre to some degree putting their money where their mouth is My suspicion is most of them have bought the stock as a show of political support. In this way, Trump is conducting yet another public fundraising from his supportersthis time through the public markets.
Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. Its chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. Thats the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......
DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way thats significantly divorced from the reality of their underlying business. Combine those two trends and youll start to see why Trumps media company could be valued at roughly $9 billion if it merges with DWAC.
Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the greater fool theory of investing, meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. Here youve got ideology involved [too]as far as I can tell, the vast majority of DWAC investors are Trump political investors, and theyre to some degree putting their money where their mouth is My suspicion is most of them have bought the stock as a show of political support. In this way, Trump is conducting yet another public fundraising from his supportersthis time through the public markets.
Idiots who purchase meme stocks are betting that they can get out before the other idiots figure out that the stock is worthless
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That's what I wondered, too! Does anyone use it besides TFG or has even he moved on??
Rhiannon12866
Mar 23
#1
To us it looks like a con, but he's reaching out to oligarch investors abroad who want to buy an American president.
ancianita
Mar 23
#13
There are exceptions to your 'Zuckerberg rule': Nov 2012, Bloomberg penned an op-ed officially endorsing Barack Obama
ancianita
Mar 23
#57
But if this stock is locked and unsellable for 6 months, then he won't be able to cash in before his deadlines.
TheRickles
Mar 23
#9
I think Trump has exposed 247 years of White Male preferential treatment in a capitalist society.
Baitball Blogger
Mar 23
#30
It's long overdue. You have to be brave enough to question all the false icons in our society.
Baitball Blogger
Mar 23
#47
Capitalism as we see it today, is riddled with loopholes and exceptions.
Baitball Blogger
Mar 23
#48
That last point is the key - this deal won't help him meet the Monday deadline for covering the bond.
TheRickles
Mar 23
#24
A stock is only worth whatever someone is willing to pay for it. Are folks bidding it up as backdoor gift to Trump?
dutch777
Mar 23
#27
Exactly. Last night on msnbc there were tax and bond experts saying just that. The price of the st ock
lindysalsagal
Mar 23
#40
TSF is using the playbook of Bernie Madoff. Let's hope it ends up...
FailureToCommunicate
Mar 23
#36
DWAC soon to be TFG is a meme stock that relies on the greater fool/idiot theory
LetMyPeopleVote
Mar 23
#50