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:

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

Dividend Stocks

Top Canadian Stocks to Buy Right Now With $1,000

Investing in stocks is not about timing but consistency. If you have $1,000 to invest, these stocks offer an attractive…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Investing

1 Way to Use a TFSA to Earn $250 Monthly Income

Here's one way long-term investors can utilize a Tax-Free Savings Account to generate $250 per month in passive income in…

Read more »

cloud computing
Dividend Stocks

Is Manulife Stock a Buy for its 3.5% Dividend Yield?

Manulife stock has been a long-time dividend winner, but the average has come down over the last few years. So…

Read more »

Person holds banknotes of Canadian dollars
Dividend Stocks

This 7.5% Dividend Stock Pays Cash Every Single Month

Monthly dividend income can be a saviour, but especially when it provides passive income like this!

Read more »

3 colorful arrows racing straight up on a black background.
Investing

3 No-Brainer TSX Stocks Under $50

Amid buoyant markets and improving optimism, these three under-$50 Canadian stocks are poised to earn superior returns in the long…

Read more »

jar with coins and plant
Dividend Stocks

2 High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These TSX stocks still offer attractive dividend yields.

Read more »

oil pump jack under night sky
Energy Stocks

Oil Price Outlook for 2025, Plus Smart Energy Stocks

If you are looking to buy some energy stocks now or next year, it's essential to consider the oil price…

Read more »

Data center servers IT workers
Tech Stocks

2 Things to Know About Dye & Durham Stock Before You Buy

Dye & Durham stock has given some good returns to those who bought the dip. Is the stock still a…

Read more »