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DWAC Stock Falls 5% After Elon Musk Inches Closer to Twitter Deal

  • Digital World Acquisition fell 5% on Monday after Elon Musk inched closer to a deal for Twitter.
  • Digital World is in plans to merge with former President Donald Trump’s social media company, Truth Social.
  • Musk has made a $43 billion bid for Twitter and has criticized the platform about free speech issues.

Shares of the special purpose acquisition company planning to merge with former President Donald Trump’s social media platform continued their decline on Monday after Elon Musk inched closer to taking over Twitter.

Digital World Acquisition fell 5% in Monday trades, and the decline was sparked after a report said Twitter’s board of directors were moving closer to Musk on a deal, with a potential announcement coming as early as today.

Musk has offered to buy Twitter for $43 billion, or $54.20 per share, and in an SEC filing last week his bid got more serious after he disclosed that he has received several financial commitment letters from banks and lenders, which would help get the deal done. 

Musk has criticized the platform on free speech issues and censorship in the past. Under his control, Trump’s Truth Social, billed as a free speech alternative to Twitter, would likely be less appealing to both users and investors.

For Digital World investors, Monday’s decline is only the continuation of a months long trend as the stock price moves closer to its


IPO price of $10 per share. Following the announcement of its planned merger with Truth Social last year, the stock briefly spiked to a high of $175. The stock is down about 77% from those record levels.

And one hedge fund expects the decline to continue, according to a short report released last week. Kerrisdale Capital believes due to regulatory scrutiny, a deal between the Digital World SPAC and Truth Social won’t get done, and that the stock should head back to $10 per share.

“DWAC’s stock has much further to fall given the demonstrably misleading statements in DWAC’s registration statement, the status of TMTG’s operations at the time the merger agreement was executed, the cast of characters seeking to consummate that merger and those individuals’ flagrant disregard for SEC rules and regulations,” Kerrisdale said.

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