Digital World Acquisition (NASDAQ:DWAC) stock finally had a strong up day Tuesday, with shares popping more than 5% on rumors that Fox News might put some of its content on the Truth Social application. That was a relief for DWAC stock investors, as the rally came after a seemingly unending string of down days for Digital World.
The special-purpose acquisition company, which intends to acquire former President Trump’s new company Trump Media & Technology Group, had been one of 2022’s hottest stocks. However, that buzz has quickly faded following a painfully glitchy rollout of the company’s Truth Social app, along with increasing questions about the deal and Mr. Trump’s involvement in the company.
For one day, those questions were put aside. On Tuesday, it was rumored that Fox News will be starting to put some of its content onto the Truth Social application. Fox News is by far the most popular cable news channel with conservative viewers. If the rumor came to pass, its presence on Truth Social would give the social network a serious jolt in terms of regaining user attention.
But while that seemed like a clear positive for DWAC stock, Tessica Glancey, senior manager of media relations at Fox News, told InvestorPlace that Fox News “has not joined the platform Truth Social.”
Regardless of whether Fox News joins Truth Social, broader concerns remain. For one thing, why isn’t there any new information about when Digital World will actually complete its merger with the Trump Media & Technology Group? On Digital World’s website, there haven’t been any new press releases since December 4, 2021. It’s April 2022 now. The company’s flagship app launched in February. Why isn’t Digital World giving investors updates either about the business’ performance or timing of when the deal will close?
Adding to that point, Digital World does include a link to the company’s Securities & Exchange Commission filings from its website. Follow that link, and you’ll see that DWAC’s most recent SEC filing was a notification that it wouldn’t be able to file its 10-K annual report on time. That’s not exactly reassuring.
A lot of people have been giving Digital World the benefit of the doubt for months now, myself included. A right-wing social media site headed by a former president could be a winner. It was easy to excuse things such as the buggy launch of the app if you focused on the bigger possibilities of the app. However, time keeps dragging on. Trump himself isn’t posting on Truth Social nor is Digital World giving investors much of any new information to understand the company’s ongoing strategy or timeline going forward. Ultimately, it’s going to take more than Fox News rumors to get investors truly excited about DWAC stock once again.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.