The Trump SPAC Is up 1,220% in 2 Days: The New Meme Stock!

Here’s what investors need to know about this meme stock and whether there’s still an opportunity to make money here.

| More on:
Business man on stock market financial trade indicator background.

Image source: Getty Images

Digital World Acquisition (NASDAQ:DWAC) stock is up 1,220% since Wednesday. This little-known company is a Special Purpose Acquisition Vehicle (SPAC) for Donald Trump’s latest social media venture. In other words, it’s a billion-dollar company that didn’t exist just a few weeks ago. 

Here’s what investors need to know about this meme stock and whether there’s still an opportunity to make money here. 

Donald Trump’s SPAC

On Wednesday, former U.S. president Donald Trump announced a new social media venture that would rival all the platforms that banned him earlier this year. The company is called Trump Media and Technology Group and will be merged with a shell company called Digital World Acquisition Corp (DWAC). 

The news impacted all social media stocks. Meanwhile, DWAC stock is up from US$10 on Wednesday to over US$131 at the time of writing today. Some believe the stock could be worth much more by the end of the day. 

It’s worth noting that the company is little more than a press release at the moment. It expects to launch a social media app called TRUTH Social by 2022 but doesn’t have a product at the moment. Trump’s earlier attempt to launch a media company (From The President’s Desk) was an abysmal failure, so there’s no reason to believe TRUTH Social stands a better chance. 

However, DWAC isn’t trading on fundamentals or realistic prospects right now. Instead, it’s the latest in a long line of meme stocks that seems to have captured the attention of retail investors. 

Meme stocks are still fashionable

Meme stocks tend to be driven by one key factor — influence. Influential celebrities like Elon Musk and Chamath Palihapitiya have made several billions in profits this year based on their online influence and social media cred. 

Donald Trump, of course, has more social influence and media attention than anyone else. That’s the primary reason his SPAC has become an instant success. Early investors are now sitting on a 10-fold gain, and Trump’s organization now has access to over US$1 billion in public capital. 

It’s a clear indication that meme stocks are still fashionable. 

Where to invest

In my opinion, the best meme investment right now is Ethereum. This blockchain network hosts non-fungible tokens (NFTs) and Decentralized Financial (DeFi) instruments that have gained significant traction on social media. Ether has also outperformed Bitcoin over the past year: it’s up 890%, while BTC is up 380% since last October. 

Also, Ethereum is easily accessible for Canadian investors. CI Galaxy Ethereum ETF (TSX:ETHX.B) is an exchange-traded fund that tracks ETH. Its management fee is relatively low, while the ETF qualifies for tax-shielded accounts. That means you can add ETHX.B to your Tax-Free Savings Account. 

Bottom line

Trump’s SPAC has generated a 10-fold return for early investors in just two days. It seems meme stocks are still fashionable. Canadian investors should bet on the most enduring meme of them all — cryptocurrencies. Keep an eye on the Ethereum ETF.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

Suncor Stock: How High Could it Keep Going?

Down 26% from 52-week highs, Suncor stock offers you a dividend yield of 5.3%. But is this TSX energy stock…

Read more »

money cash dividends
Dividend Stocks

TFSA Investors: Create $313 in Passive Income by Buying in 114 Shares in 3 Dividend Stocks

Canadian investors seeking passive income from dividend stocks should think beyond the first year, but here is what you could…

Read more »

Various Canadian dollars in gray pants pocket

TFSA Passive Income: Make $316/Month

Investors can look to generate passive income in their TFSA with monthly dividend stocks like TransAlta Renewables Inc. (TSX:RNW).

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

This Canadian Monthly Dividend Stock Pays 11.5% Every Year

Here’s a great Canadian dividend stock you can consider buying now to earn handsome passive income each month.

Read more »

rail train

Down 9.8% From Highs, CN Rail Stock Looks Like a Great Value Today

CN Rail (TSX:CNR) may not be a steal, but it appears like a great value, even as tides of recession…

Read more »

Dividend Stocks

Already up 15.87%: Is Dollarama Stock Still Worth Buying Today?

Is Dollarama stock worth buying as a defensive growth stock, despite inflation normalizing in recent months?

Read more »

grow money, wealth build
Dividend Stocks

Looking for Dividend Stocks in Canada? Check Out These Top Picks

Invest in these two top dividend stocks in Canada for long-term wealth growth through a self-directed passive income stream.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background

Better Dividend Buy: Enbridge Stock or CNQ Stock?

Enbridge and Canadian Natural Resources are TSX giants with great track records of dividend growth. Is one stock now oversold?

Read more »