DD on DWAC via /r/wallstreetbets #stocks #wallstreetbets #investing

I’ve been following and doing DD on DWAC since December.

I’ve never found so much certainty in one ticker and it seems too good to be true. Prequel – the certainty surrounds the subject of PIPE investor warrants.

What am I missing?

If you are the type that has invested in DWAC because you think it has huge potential to grow and make money then this post is probably not for you. You might be right about the company’s potential. Although, you didn’t buy the company’s profits. You bought the company’s stock.

If you are the type that already knows that the market is designed to take your money. And, you seek to take advantage of that knowledge. Then, this discussion might interest you.

*Reminder: Potential to grow holds less value in trading options than certainty does. We are looking for shreds of certainty here. And, making the decisions from there. I don’t actually care if the price goes up or down. I care about knowing which direction it will move and when…

I give little to no fucks about politics, social media, or Trump in regards to my investing decisions. I am here to make money.

Why is the price so high?

  1. Low float
  2. The high amount of retail investors buying and holding.
  3. Cannot be shorted
  4. Has mass media attention
  5. Short interest up
  6. Price is up… Lower now, yes… still massively up.
  7. Volume is up

And, obviously, all of these factors tie into each other. Price goes up – more buyers than sellers because the price is going up and we all want to make money – low float because it seems to be mainly retail investors buying – retail investors because of mass media coverage – the cycle continues – yada yada…

Why is the price now going down?

  1. The first failure of the Truth Social Media launch
  2. The second failure of the Truth Social Media launch
  3. Mass media coverage flipping directions and spreading FUD (this seems to have increased 10 fold in the past three days.)

Will the PIPE investors actually drive the price down to $16 after the merger? I haven’t been expecting that because that would be a massive swing. And, if they drop it that low days after the merger then urgent FUD might really do long-term damage. Although, the PIPE investors would still probably see large gains in that case because of all the additional shares they will receive.

Or, have the PIPE investors started spreading FUD. Has part of the launch failures and recent media coverage been intentional so that the price can have a soft landing to $16 at the time of the merger, or ten days after? This makes me sound like a conspiracy theorist. But, if I were them then I would try to do the same thing.. Fail small, let the price drop, delay the merger, keep letting the price drop, merge, execute the warrants, and then finally have a successful launch.

What’s more, is that we don’t actually know when or if that merger is going to happen. Which seems absolutely insane when considering the current valuation.

Why might it not happen? For one, because the terms of the SPAC are under investigation. I understand that most things Trump does see investigations. But, the SEC seems to actually have some solid ground here. Although, there is very little discussion of it on the web you can find some details… The merger was originally set for the first quarter of ’22. And now, I see announcements of the end of ’22. Is this because the investigation is prolonging the merger process? Or, is it the launch failure? Is it a coincidence that a delay in the merger gives PIPE investors more time to influence the price?

There’s truly a lot that can be said about the story of DWAC stock so far. And, the future is anyone’s guess.

I feel fairly certain about a few things though.

  1. The stock price is going to go lower if the investigation is actively reported on.
  2. The stock price is going to go lower if the SEC stops the merger.
  3. The stock price might go to its lowest if and when the merger does actually happen.
  4. Premiums aren’t cheap.
  5. IV is high
  6. Beta is low

A potential threat to the bearish case: What if Trump or a supporter Ryan Cohens this… As in, they have enough $ to drive the price up continuing the dilemma of its remarkably overvalued price by pulling more retail investors in and cycling through bag holders. I fear this as I contemplate buying puts. But, I’m also reminded of the PIPE investors and their motivation to drive price down.

IF PRICE HITS <$16 after the merger, whether or not I choose to profit off puts, I will buy calls.

Why would I buy calls if the price hits $16?.. Why be confident at that time? Because of the PIPE investor’s power in this story… If they are able to manage a soft price drop to that magnitude and still have a potential company with this amount of individual retail supporters then I will absolutely take bets that are in line with the PIPE investor’s positions. Because they must be some true f’ing OGs to pull off a move like this. If they succeed then I will try to follow their pricing power.

Any thoughts? Or, did I just waste an hour of my life fucking typing?