Saturday Update, Plus: Trump + SPAC = Risk

You are receiving this email because you signed up to receive emails from True Market Insiders, rebranding to Sector Edge. [Unsubscribe here]( Keep the emails you value from falling into your spam folder. [Whitelist True Market Insiders](. Forgot your login information? Click [here](. [Image] Saturday Market Update Hey TMI Subscriber, Here's your weekly TMI update plus a look at how former President Donald Trump is making headlines again. This time it's his plan to launch a new social media platform with the help of a new SPAC. Find out our vote on whether to buy shares in it. Today is Saturday, Oct. 30, 2021 Love him, or hate him, former President Donald Trump always manages to grab the world’s attention. This time, he’s looking to launch a new social platform that’s been described as an alternative to “liberal-minded” media that competes with Big Tech. This new venture is called “TRUTH Social.” The Trump Media & Technology Group struck a deal to merge with (and ultimately list publicly through) a SPAC, or Special Purpose Acquisition Company. SPACs provide a different structure for going public than traditional IPOs or direct listings. And they open up opportunities to invest in companies that would otherwise be inaccessible. Shares of the Trump SPAC, Digital World Acquisition Corp.(DWAC), quadrupled in the two days following the announcement. Day traders on platforms like Reddit posted proof of their gains, inspiring other individual investors to do the same. "I’m very lower middle class and somehow made $2,590 in like 90 seconds pushing buttons on my phone while sweating … my kids are gonna have an epic Christmas," wrote Reddit user dragonbenj. After popping from just under $10 per share to $131.90 in two days, DWAC dropped to $60 the following Tuesday, and had bounced up another 12% to $72.27 by intraday Thursday. Where it goes from there is anyone’s guess. Welcome to the world of SPACs on steroids. "This is extremely unusual, especially now," Matt Kennedy, senior IPO market strategist at Renaissance Capital, told CNN. "We saw significant pops during the height of the SPAC bubble. Nowadays it's rare to see a SPAC pop more than 10%.” That’s not the only unusual aspect of the deal. Generally, SPAC merger announcements are more detailed and contain financial projections and capital structure. Not this one. All it took was a press release and an investor presentation with no reference to how much money it could potentially make, and droves of wide-eyed investors bought into it. However, this Trump-related SPAC is following the same storyline as many others. It shoots to the moon, then abruptly falls back down to earth. Driven by sentiment and momentum, it has little else to keep it in orbit. Revenue? No. Earnings? Nope. Profits? Value? Growth? No… No… and No again. Sounds about as appealing as slurping hot soup on a summer day in Death Valley. In truth, SPACs pose even more risk than other “meme of the month” stocks. At least many of those are emerging growth stocks that rise from dying industries. Their saving grace: a track record, history, and fundamentals. If you seek long-term growth, don’t even give SPACs a first or second thought. If SPACs still whet your appetite, realize that any stock driven by strong sentiment is a gamble and high risk. No two ways about it. Still, just as, say, not allpenny stocks are bad, not all SPACs are bad either. The trick is to find out about them from a trusted source, like TMI, and follow their guidance like your financial life depended on it. This Week in True Market Insider Oct. 25 - Oct. 29, 2021 [Micro-Cap Monday: Four Numbers You Should Know Like the Back of Your Hand — Bill Spencer]( P/S... P/E... P/B... D/E... Learn what [Bill Spencer calls the four keys]( to the investing kingdom, what they mean, and how knowledge of them will rival that of most individual investors. [Technical Tuesday: Point And Figure Charts Made Easy — Chris Rowe]( Chris Rowe takes the mystery out of [the most powerful type of chart]( by the time you finish reading his article, you’ll see the market more clearly and be a smarter investor. [Trading the Bitcoin Beneficiaries — Tim Fortier]( Tim Fortier explains [how to get exposure]( in your portfolio to Bitcoin without owning any actual coins or shares of the newest Bitcoin-related ETF. [We Just Got The Dow Theory Buy Signal —Costas Bocelli]( The market is firing on all cylinders, and Costas Bocelli points to [the performance of one, specific index]( that has him in full-fledged bull mode. [A Century-old Company Riding the Micro Mobility Wave — Karen Riccio]( If you haven’t yet ridden an electric bike, you don’t know what you’re missing. Just don’t miss the investment opportunity Karen Riccio unveils in a [century-old staple of the micro-mobility industry](. Learn More About This Week’s TMI Topics [Types of SEC Filings]( 10 Public Companies With the Biggest Bitcoin Portfolios]( Musk and His Crypto Portfolio]( Ratios: Compare Relative Values]( American Buys an E-bike Every 52 Seconds]( [Shimano is Scared to Go Too Fast]( Dow Theory: Six Tenets Explained]( [Will This Bull Run Last Forever?]( Copyright © 2021 True Market Insiders, All rights reserved. Our mailing address is: 33 SE 8th St, Boca Raton, FL 33432 Want to change how you receive these emails? You can [change your preferences here]( DISCLAIMER The information contained herein has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. 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