Two hedge funds sell stakes in Trump SPAC firm DWAC after merger news, big stock price rise
"Donald Trump’s new social media SPAC, explained"
Published Fri, Oct 22 202111:07 AM EDTUpdated 18 Min Ago
Dan Mangan @_DanMangan Yun Li @YunLi626
Key Points
* At least two hedge funds sold their stakes in Digital World Acquisition Corp. after that SPAC firm announced plans to merge with former President Donald Trump’s planned social media platform.
* The sell-off by Lighthouse Investment Partners and Saba Capital Management came as DWAC saw a huge rise in the price of its stock.
* “I knew that for Saba the right thing was to sell our entire stake of unrestricted shares, which we have now done,” founder Boaz Weinstein said in an e-mailed statement cited by Bloomberg.
* The sell-offs reflect the risk of being associated with Trump, who was impeached after being accused of inciting the Jan. 6 Capitol riot.
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“Lighthouse was not aware of the pending merger and no longer holds unrestricted shares of the SPAC,” the fund said.
Asked if Lighthouse profited from its DWAC investment, the firm said it would not comment further.
The second hedge fund, Saba Capital Management, also sold off its stake, according to reports by The New York Times and Bloomberg.
“I knew that for Saba the right thing was to sell our entire stake of unrestricted shares, which we have now done,” founder Boaz Weinstein said in an e-mailed statement cited by Bloomberg.
“Many investors are grappling with hard questions about how to incorporate their values into their work. For us, this was not a close call,” Weinstein wrote.
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