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Oct 24, 2021 | Does Trump open up the market for Swing Traders?

Weekly Newsletter- Week of 10.24.2021 


Trump Taking Media Company Public 

This week we learned former President Donald Trump had made plans to take his medical company public via SPAC, or special purpose acquisition company. Digital World Acquisition Corp (DWAC) will be joining together through a merger to help Donald Trump launch his very own social media platform. Trump was previously banned from both Twitter and Facebook in response to the unfortunate events that took place at the U.S. Capitol earlier this year. Ever since then, Trump has been exploring opportunities to form his own media company. Not only do we now know the company that he will be launching, but we also know his plans to make the media entity a publicly traded company. 


SPACs 

SPACs are blank check companies that look to take another company through an acquisition or a merger. Investors generally have little to no insight into what private company the SPAC is targeting for a merger. SPACs provide additional funding that allows the private entity to go public through the newly formed joint venture. As we’ve noted in the past, businesses may choose to go public via SPAC instead of an IPO as SPACs are seen as a quicker and easier process for going public. SPACs have become an increasingly popular method for taking a company public. We’ve seen the number of SPACs skyrocket in the last two years. For more information on SPACs and why they’re used, please read our blog on SPACs titled What are SPACs & Why are they so Popular?

DWAC Soars 

Shares skyrocketed after the announcement as DWAC has become exceedingly popular for retail traders- the ticker was one of the most mentioned on WallStreetBets this week. Trading volume was so high, the trading of DWAC shares was halted several times on Thursday and Friday. We’ve seen this happen on occasion throughout the pandemic when the share prices of a company are viewed as “too volatile”. This usually happens when a share price makes rapid price fluctuations in just a short amount of time. DWAC stock price jumped another 100% on Friday, bringing the weekly gains to over 800%! Before the news regarding Trump Media was reported, DWAC shares traded for about $10 a week ago. Shares closed over $94 on Friday. 


Trump Media and Technology Group 

This yet-to-be-launched company was formed to quote “Fight liberal media and battle big tech.” Truth Speech, as it’s been dubbed, hopes to implement “open, free, and honest global conversations”. 

Weekly Swing Trades

PNRG (Prime Energy)

October 2, 2022

Entry Price:

80.62

Stop Price:

76.85

Target Price:

88.04

Time Frame:

1 Week Hold

Expecting a short-term bump after a recent OPEC+ announcement regarding the a supply constraint to oil. The constraint would result in ~1M less barrels of oil per day, which should cause a price jump. Low RSI and bouncing off our 250 day moving average, both hallmarks of a good swing trade.

DV (Doubleverify)

October 2, 2022

Entry Price:

27.75

Stop Price:

26.75

Target Price:

29.00

Time Frame:

3 Week Hold

Using our moving averages heavily on this swing trade, look for continued strength as we try to notch out a 6-8% gain. Specifically, we are taking advantage of of a recent cross over in the 50 day moving average. Last week closed down, so wait for confirmation of a reversal.

PayPal Looks to Acquire Pinterest 

In more breaking news, we learned about PayPal’s plans to acquire growing social media platform Pinterest. As more and more big technology companies look to join the crowded FinTech space, it’s no surprise PayPal is looking to expand its eCommerce presence. At a deal worth an estimated $45B, Pinterest stock popped big on the news, jumping nearly 20% in one day. The stock has since cooled off while PayPal’s stock has been trading down by over 10% this week. 


What’s in it for PayPal? 

While still considered rather niche, Pinterest has become a major destination for people seeking ideas for their home, their wardrobe, and everything in between. Pinterest predominately generates revenue through digital ads, they’ve been growing as an eCommerce platform. PayPal has openly discussed their desire to bring more direct purchases to their platform. If PayPal can help Pinterest grow into a shopping destination, PYPL could make nearly 3% on all transactions. Additionally, PayPal may also look to encourage its advertisers to spend ad dollars with Pinterest. This deal stands to be PayPal’s largest acquisition ever. 


Super App 

As PayPal continues to expand its services, the term ‘super app’ continues to be thrown around. PayPal is looking to keep its users engaged on the platform for even longer as they continuously expand their services. PYPL estimates their user base will grow to 750M people by 2025- they currently have just over 400 million users. By acquiring Pinterest, PayPal is looking to enhance its engagement between consumers and merchants with PayPal being the central facilitator in the commerce journey. Buying Pinterest would now put PYPL as direct competitors to Facebook and Instagram. 

Upcoming Economic Reports

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Weekly Watchlists

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Weekly Review

Market Performance- Week of 09.25.2022

Recent Winners

SBUX (Starbucks)

SBUX (Starbucks)

Entry Price:

85.00

September 11, 2022

Price at High:

89.90

Return for Members:

5.76%

Timeline:

2 Month Hold

Strong momentum over the last few weeks. Watch for a mean reversion, but if moving averages stay consistent look for an early play to open the week.

PNRG (Prime Energy Resources)

PNRG (Prime Energy Resources)

Entry Price:

83.20

September 4, 2022

Price at High:

100.00

Return for Members:

20.19%

Timeline:

3 Week Hold

PNRG had a drawdown to historical levels of support (around the 100 day moving average). Looking to make an entry in the coming days as we also have macro tailwinds with the energy crisis in Europe.

PYPL (Paypal)

PYPL (Paypal)

Entry Price:

87.00

August 28, 2022

Price at High:

103.00

Return for Members:

18.39%

Timeline:

4 Week Hold

Playing off the dip in June, we're starting to see momentum as the 50MA is crossing over the long-term averages. Look to for momentum to continue and an early entry on Monday.

Recent Watchlist Winners

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