What happened
Shares of Digital World Acquisition (DWAC) climbed 10% on Tuesday after former President Donald Trump's new social media app debuted on Apple's App Store.
So what
Digital World is a special purpose acquisition company (SPAC) that intends to merge with Trump Media & Technology Group. The combined company plans to take on the likes of Meta Platform's Facebook and Twitter with Truth Social, a social media platform Trump says will "stand up to the tyranny of Big Tech."
Truth Social launched on Sunday and quickly rose to the top of Apple's App Store charts.
Image source: Getty Images.
However, the surge in app downloads might have been a bit much for the fledgling social network to handle. Some users reported difficulty in creating an account, while others were prompted to join a waiting list.
Still, Truth Social's noteworthy debut on a major app store sparked excitement among investors, who bid up Digital World's stock price in kind.
Now what
Many would-be challengers have attempted to wrestle away market share from Facebook and Twitter, but few have been able to gain much traction. Truth Social, however, could be a more formidable competitor. Trump maintains a large and loyal following, and many of his supporters will likely join him on the new network.
That said, going head-to-head with the social media titans will be no easy feat. Should its merger be completed, Truth Social could gain access to as much as $293 million in cash held in trust by the SPAC. The company also has agreements for $1 billion in additional investor capital to be received upon the merger's closing. Nearly $1.3 billion in funding is certainly not peanuts, but it pales in comparison to the tens of billions that Facebook alone spends to grow its business each year.
