If you buy and hodl, you will be rewarded for your efforts bigly!
(media.greatawakening.win)
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It is the TMTG shareholders that get the extra shares of DWAC. If 40 million additional shares are issued, that represents a ~50% share dilution to the DWAC holders. A 50% dilution typically means share price on day of dilution is cut in half. (double the number of shares, the price is cut in half.)
I think this is a wonderful investment, but people need to go in fully aware. I plan on buying some post-squeeze of GME. Anyone new to the market needs to educate themselves to the risks and rewards of any investment.
Are you saying if the merger goes through, then my meager 12 stocks could be half their worth at merger time. But then if the resulting company becomes a new GOOG or FB, then they could moon? And what if the merger does not go through? Is that possible?
Please pretend I'm a 5yo... :-)
I am just saying what the article is saying, in a lot easier wording:
If certain price targets are met in DWAC, the shareholders of TMTG, who have invested in DWAC, will receive up to 40 million additional shares of stock - effectively doubling the number of shares in existence (shares outstanding).
Think of it like a pizza: If you have 1 pizza (1 company), and you have 8 slices... but then you decide to make that same 1 pizza divided into 16 slices instead - you have doubled the number of slices, but the slices are now half as big as they were.
DWAC has about 36 million shares presently. If they dilute to a total of 76 million shares, that will effectively double the number of shares, but the company won't magically be worth twice as much immediately.
This is very common in companies trading on the market - it is done to raise capital, expand the number of shares for more growth, etc. DWAC is being public and forewarning investors of their intentions, and it is all very above board. So, if you see the stock go up and stay up very high (meeting price targets), you can expect a share dilution.
https://www.investopedia.com/terms/d/dilution.asp
Thank you very much, I'm quite adept at software development and engineering, but I'm an economical illiterate. That is also why I don't invest in more than I can afford to lose.
So when it reaches that high for a while, that is when I sell to avoid diluting my investment?
If they do a 2:1 split at $80/share and you have 200 shares, you would likely end up with 400 shares worth $40/share so essentially a wash.
The lower per-share price tends to drive demand and values higher over the next year or so. In my opinion I’d be thrilled with a stock split post merger.
For regular shares (not warrants, not sure about DWACU), if the merger fails to go through you will be compensated $10/share (the initial offering price). You’d lose any spent money over the $10 mark though.
ThanQ, good explanation.
I can't answer that - that would be up to you.
I think it is best to look at DWAC as a long term hold, and not worry about the fluctuations. If you are looking at trading it, instead of investing in it, then yes, get a nice gain and go... but then you are paying short-term capital gains tax.
Warren Buffet is known for saying when he is asked "When should I sell stock in a good company?" He replies, "Never".
Gotcha, thanks again.
(I still think the best investment any of us will ever see, is the GME squeeze).
If you've been following that, you know what I mean. I believe the squeeze has been designed from the ground up to do what it is doing - knock the banking cabal on it's ass.
If you are aware of the phrase "diamond hands", then look at this image closely...
Diamond hands:
https://imgur.com/a/OA4qCdH
Nice pic, have seen it before. I have 2 of GME, not much but did not get in before it reached something like 90 (also have a few AMC). My intention was exactly to have diamond hand, as you say (yes heard that expression).
I'm not the big gambler. If these stocks go to zero I'd say "meh, it was fun to follow". If they go sky rocket, it's icing on the cake.