What's up, Everyone? All right. So in this episode, I'm going to talk about the epic failure of the Truth Social Watch. Now, this isn't political, I'm just looking from the perspective of a trader that this doesn't look good. And let me explain what's going on here.

So for those who don't already know, Dwac is a special Acquisition company. And in the Fourth Quarter last year, we got news that the intention of Dwac was to merge with Trump Media, the owner of Truth Social, and to bring True Social to become a publicly traded company. Fireworks! Everyone was super excited. Huge buzz.

The shares of the special Acquisition company went from ten dollars all the way up to 175 dollars a share before coming down to where they are now at about 55 dollars a share. So one of the things that we learned is that, uh, Dwac and these specs, they're blank check companies and so investors will invest in the Spac not knowing what company that special acquisition company is going to merge with to make public. And so they really have no idea. it's up to the management of of that specific acquisition company to make a good decision.

And in this case, they chose Trump Media, which is a, very, um, a very hot, trendy, uh idea. It's like the ultimate kind of meme stock in a way people are, so it's a political statement to own shares of it. It's really a big deal, but the problem is, Dwac only sold about 28 million shares to investors at 10 a share, so they raised 280 million bucks. Well, that's not enough to buy.

Truth, Uh, True Social or Trump Media. They had a higher price tag on it, and so Dwac is going to merge. At least that's what it looks like they're going to make. They're going to do this merger, but they're only going to get a small percentage ultimately of the total number of shares of the new company.

That's the way the merge is going to work. They're gonna get about 13. A little less than 13. That's what it looks like right now.

13 14. but I think around 12.8 percent. Um, now there's some sort of fuzzy things here. and the investor presentation.

It was a little bit confusing. There was some typos on it, so there's a lot of people that have been a little bit confused about exactly where the chips are going to fall. But it looks like Dwac is going to get about, let's say, 13 of the new company. And so the problem here is that early investors in the Dwac Spac first of all, have crushed.

I mean, they're already up 400 500 percent just at 55 right now. All right, And that represents if you extrapolate 55 a share and that being 13 of the company, then you're talking about a company that's worth over 5 billion. 6 billion, maybe more now, depending on what the price is when the merger goes through. Now, when we compare that to some other ipos, let's just look like high level.

So in Facebook ipo'd it was. I think in 2012, Uh, 2013 they had about 850 million active users, 850 million active monthly users. When Twitter Ipo they had 100 million active users. Okay, now Twitter ipo did a valuation of I think it was around 15 billion dollars and Facebook valuation was like 100 billion dollars.

So it was huge. But the active users were huge. Now, the problem with Dwac and this botched launch of Truth Social is that when True Social initially launched in February, it was the number one downloaded app in the Apple Store and three days in a row number one download app and I saw it. I was like, you know what I want to download, I want to see what this is all about.

I want to see what it looks like, what the activity is going to be. You know I want to know more about this. Well, guess what? I'm on the wait list Me, along with about 1.5 million other people. I'm sitting here on the waitlist.

Number 300, 000 over 376 000. I mean, I'm deep in the wait list and so I've been on this wait list for over a month and so what's happened is that the number of downloads of the app has dropped by like 95 from 175 000 downloads a day for like the first three days down to like 5 000 6 000 downloads a day. Why? Well, no one's talking about it. No one's The buzz is like dropping even.

Uh Trump is not actively using it. He's not putting out like tweets or truths every single day throughout the whole day the way he did on Twitter with his 88 million followers. So how is he going to translate those people coming over through Social if he's not using it, even for this small group of people that are on it? I think right now it said that there's like 500 000 active daily users. but that's point.

Five percent of the number of active users that Twitter had when it ipo. Twitter was also producing revenue when it ipo'd So was Facebook, not Truth Social. So how is it possible? I mean, you take what's what's 0.5 what's 0.5 percent of a 15 billion evaluation, which was the valuation of Twitter Approximately right? I mean, you're talking about a really, really small valuation when you're comparing it to. I mean, the companies that you probably should be comparing it to.

It's most closely akin to Twitter, right? But it's clearly much smaller. And so. And then there's another note that, um, part of the um, part of taking Uh Trump media public was, um, private investment in public equity. So this private investment in public equity allowed a group of investors to invest a billion dollars and they're going to own shares of the publicly traded company.

But they got those shares at a huge discount and they have no lockout period. Which means as soon as the company becomes the mergers, the deals closed. They're going to be able to sell those shares on the open market for instant profit if they want to. And I mean kind of, why wouldn't they? Because they're going to look at the numbers kind of just the way I did.

I mean, they're going to look at them even deeper From you know, they're going to know stuff that I don't know, but they're going to look even deeper at the metrics. they're going to compare it to the best you know comps that they can, and they're going to realize that this is probably a good time to cash out. And so what I'm concerned is going to happen is that the current holders of Dwac right now and I'm not one of them, I don't have a position on it. I, you know, so my opinion is just kind of.

It's just my opinion. but um, I don't like the stock because what I'm concerned about is that when the deal closes, it's going to drop, the price is going to fall. And the insiders who are buying the shares right now thinking that this is going to become you know, one trillion dollar company are. I mean it's It's like they're going to be bag holders.

They're going to get caught holding the bag on this. So I'm a big fan of actively trading volatility. If it's volatile, I'm happy to trade it at whatever price it is. If it's because it's selling off and it's giving me a bounce, or if it's because it's going higher.

It doesn't really matter to me, but the fact is, in the last month, the stock is down almost fifty percent from a high of a hundred down to like fifty five. So it's down forty five percent. The downloads in the app store are down over ninety percent. There's only like five hundred thousand active daily users.

It's not clear that they're making any money from those users right now. Even the person who's this sort of whole brand is around isn't right now actively using the platform, so I don't get it. But it's the biggest win for the insiders, right? So the Spac insiders, it's a huge win for the public. For the private investment in public equity investors, it's a huge win.

So I feel like it's a huge win for everyone. Except for who retail traders retail traders are the ones that are going to get smoked, they're the ones that are going to buy into it thinking it's going to be like the next game stop and I don't think that's going to happen. And I mean even with Gamestop, you know Gamestop went all the way up to like 500. And you know today.

let's see the current price of it is. Um, what is that? We can do a split screen here. So the current price is, you know, 165 bucks which you know all things considered isn't that bad. I mean it's it dropped down quite a bit.

There's the news, the stock split. You know it's coming back up. but you know you look at Dwac and it's not pretty. It's not pretty.

This charts coming down a lot. It did squeeze up here in February when they had the launch when it was the number one download in the app store. People were like okay and I was like okay, there's a wait list like that's kind of like it's exclusive. There's like a little bit of buzz and then a month later you're still on the wait list.

I mean like this is. this is not a successful launch. To be a successful launch, you need to go very quickly from waitlist to you're in and lots of people are super active and interesting things are happening. And there's the controversy and the media is covering it and all this stuff's going on.

And why couldn't they have done that? It would serve retail traders and investors so much better. It would serve long-term investors or the investors that are in from, you know, a long time ago. Better right? I mean serve everyone better. Why couldn't they pull it together and have a successful launch? Well, I guess it's harder than it than it looks, but it's kind of a bummer.

And this was a chart um here showing the the download. So 175 000 for the first three days, you know? So I was in there in the first three days. I don't remember what day I registered, but I'm number 376 000? whatever. And you know now that downloads are just going down more and more and more.

Why? But there's no buzz, right? No one's people aren't really using it and this is it. just feels like a real flop. It feels like an epic failure. and I'm I'm disappointed.

I mean, from as from a trading perspective, I'm disappointed. For the investors that are going to buy this, and you know, short term I think suffer losses. I think it's It's unfortunate. So I don't know.

That's just my two cents. Well, you know, as I said before, I'm not a long-term investor. I'm a short-term trader. I'm a day trader.

So you know, at the end of the day, I guess it doesn't really make a huge difference. Either way, if it's volatile, I'll trade it. If it's not, I won't. I haven't been actively trading it.

You know, In this current range here, it just dips below 55 here just this moment. But yeah, I don't know. Share me with share with me. Your thoughts down in the comments below, I'm always curious to hear what other people have to say.

I saw, you know, an article on Seeking Alpha that's going to be a 1 trillion dollar company? Um, you know So some people are saying this is what it's gonna do and you've got a strong thesis behind it. Share it with me. Tell me. Tell me why I'm wrong, Why I'm stupid that you know this thing is not a disaster.

Maybe this is all part of the strategy. I don't know, it's a funny strategy, but you tell me anyways. Uh, just my two cents Curious to hear your input. So hope you enjoyed this episode and make sure you subscribe the channel.

I'll be live first thing as always. Monday morning through the week. Um, tomorrow morning. et cetera.

Morning show right? Live Day trading, morning show every day between 8 30 and 9 30. At that time I'll go live and give you guys my watch list for the day. What I'm looking at, what I think's moving and I may even take some trades. If there's some stocks moving, I'll jump in and ride the momentum.

I did trade Dwac in those two days where it went from. you know, 10 bucks all the way to 175. it was pretty incredible. It was a wild ride that's for sure.

So um, some of those may even still be on youtube if you want to check them out. But anyways, that's it for me. I hope you guys enjoy the video and I'll see you in the next episode. And that right, there was an entire video with no ads.

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