DWAC is a holding company (SPAC) that already did the paperwork to be listed on the exchanges, but owns nothing. They acquire companies after the fact via a merger- so that company can be immediately listed on the market. The risk of a SPAC is when they sell stock before a merger partner has been identified and the merger is complete- which is not really the case here.
Once the merger is complete, they can change the ticker symbol. Shares are converted 1:1 to the new symbol. Whether the new company will trade under DWAC, TMTG, or some other name they define at the closing is unknown, but also inconsequential.
We also don't know what the final deal will be. A leak of one of the recent drafts showed DJT as owning 58% of the combined company. I understand that one of the beneficial owners (>=10%) is tied to the Brazilian Royal Family (yep, it's a thing). It wouldn't surprise me if DJTJ, Eric, Tiffany and Ivanka also didn't have a sizeable stake, but if it's less than 5% it generally won't show up on SEC filings.
Since you're looking to hold long term, consider buying warrants (DWACW). They're priced with a big fat discount from the stock itself, because they come with conditions that make them hard to flip for a quick buck.
A warrant becomes common stock once the merger is complete and the company is trading under its new name, so it's a great way to build wealth on a budget when you're looking long term.
I have a question about warrants. This is my first time investing. I bought 50 warrants . Does that mean that when/if the merge happens it will be 1/1 share of the new company plus I'll be able to buy more 50 more at a set price,?
You get the right to purchase 50 shares in the new company.
Regardless of what the market price is at the time, you'll "buy" the shares for $11.50.
(In wall street-speak, you're "exercising" your warrant, sort of like exercising an options contract, or another way of looking at it is the cost to convert your warrant to a share is $11.50.)
I think with Fidelity, when the warrant exercise period opens, you'll get a message in both the app and by email.
It will have an exercise start date and an expiration date. At some point between the two, you'll have to call in and talk to someone to exercise.
In other warrant offerings, Fidelity has offered a "no cash" exercise option as well (no guarantees they always do this, and other brokers may not offer it). In the "no cash" option, they retain some of the warrants as payment.. so, let's say DWAC is trading at $100 when you exercise, and you have 100 shares.
11.50 x 100 = $1150 you'd need to pony up in cash to get your 100 shares worth $10k, or-
Fidelity would hold back 12 warrants (11.5, but you can't buy fractionals, so they always round it to the broker's favor). You get 88 DWAC Class A shares in your account (or whatever it will be called post-merger) and no cash changes hands.
I am not a financial advisor, but I'm buying more if it dips into my target range.
Same here, fellow crayon eating ape.
Most important things are: do not FOMO and chase a run ups, take profits, and try to play on house money.
DWAC is a holding company (SPAC) that already did the paperwork to be listed on the exchanges, but owns nothing. They acquire companies after the fact via a merger- so that company can be immediately listed on the market. The risk of a SPAC is when they sell stock before a merger partner has been identified and the merger is complete- which is not really the case here.
Once the merger is complete, they can change the ticker symbol. Shares are converted 1:1 to the new symbol. Whether the new company will trade under DWAC, TMTG, or some other name they define at the closing is unknown, but also inconsequential.
We also don't know what the final deal will be. A leak of one of the recent drafts showed DJT as owning 58% of the combined company. I understand that one of the beneficial owners (>=10%) is tied to the Brazilian Royal Family (yep, it's a thing). It wouldn't surprise me if DJTJ, Eric, Tiffany and Ivanka also didn't have a sizeable stake, but if it's less than 5% it generally won't show up on SEC filings.
Since you're looking to hold long term, consider buying warrants (DWACW). They're priced with a big fat discount from the stock itself, because they come with conditions that make them hard to flip for a quick buck.
A warrant becomes common stock once the merger is complete and the company is trading under its new name, so it's a great way to build wealth on a budget when you're looking long term.
I have a question about warrants. This is my first time investing. I bought 50 warrants . Does that mean that when/if the merge happens it will be 1/1 share of the new company plus I'll be able to buy more 50 more at a set price,?
You get the right to purchase 50 shares in the new company. Regardless of what the market price is at the time, you'll "buy" the shares for $11.50.
(In wall street-speak, you're "exercising" your warrant, sort of like exercising an options contract, or another way of looking at it is the cost to convert your warrant to a share is $11.50.)
Edit: BTW, that $11.50 number is not universal, it's what they set the price at in the SEC filing. https://www.sec.gov/Archives/edgar/data/0001849635/000110465921071982/tm2117087d1_s1.htm
Awesome thank you
So, regarding warrants, do they automatically convert to shares or what? I'm on Fidelity doing the DIY thing btw.
I think with Fidelity, when the warrant exercise period opens, you'll get a message in both the app and by email. It will have an exercise start date and an expiration date. At some point between the two, you'll have to call in and talk to someone to exercise.
In other warrant offerings, Fidelity has offered a "no cash" exercise option as well (no guarantees they always do this, and other brokers may not offer it). In the "no cash" option, they retain some of the warrants as payment.. so, let's say DWAC is trading at $100 when you exercise, and you have 100 shares.
11.50 x 100 = $1150 you'd need to pony up in cash to get your 100 shares worth $10k, or- Fidelity would hold back 12 warrants (11.5, but you can't buy fractionals, so they always round it to the broker's favor). You get 88 DWAC Class A shares in your account (or whatever it will be called post-merger) and no cash changes hands.
Oh la la. Thanks fren! I’ll wait for the notification (email or app) and call to exercise then.
Now if only GME would finally do it’s thing.
https://investorshub.advfn.com/Digital-World-Acquisition-Corp-DWAC-40248/
Lots of good info here, go back and read posts since last Thursday.
BUY! BUY!
His direct press release… https://www.sec.gov/Archives/edgar/data/0001849635/000110465921128231/tm2130724d1_ex99-1.htm