Trump-tied SPAC soars more than 270%, retail traders pile on

The Yahoo Finance Live panel breaks down today's market movers.

Video transcript

ZACK GUZMAN: Well, we already told you Q3 was record in terms of IPO action that we saw this year. And today, you got a dealer's choice of new entrants between IPOs and SPACs. Portillo's, the Chicagoland Italian [INAUDIBLE] seeing a more than 50% pop in their debut. WeWork seeing some pretty impressive action here as well.

And then there's Digital World Acquisition Corp, DWAC, seeing a more than 170% pop on news that that SPAC would be pulling off a merger with President Donald Trump's planned social media platform, Truth Social. And that is really seeing a pop. It's being chatted about in Reddit's Wall Street Bets right now. So, Akiko, you've got a dealer's choice of things, but all of them point to continued strength in terms of excitement around some new entrants, whether it be an IPO or a SPAC.

AKIKO FUJITA: I'm going to tread lightly around Digital World, Zack, and talk about WeWork, because I think this is kind of an incredible turnaround. I don't know if we can call it a turnaround story, but if our viewers recall, they were supposed to go public back in 2019. And then the S-1 filing came out, which showed major questions around their business models, as well as their corporate governance, $1.9 billion in losses the previous year. That led to the IPO being halted. Founder and then CEO Adam Neumann stepping down. He walked away with a $1.7 billion package. And here we are in 2021, talking about a pot for the company on its initial debut through a SPAC.

Now, we should point out, this isn't the same company that Adam Neumann was leading. For one, the valuation is much lower. Remember when SoftBank raised funds for WeWork when it was still private company, valuation was at $47 billion. This time around, we're looking at a roughly $9 billion valuation.

And, you know, in many ways, Zack, what I think is interesting about this particular story is that if you'll think about it, when the pandemic hit, everybody said, you know, even after everything that happened at WeWork, that the model wouldn't stick because people would not want an open space and something that's a little more flexible because they're concerned about being around people. That's actually been the opposite. And many companies have come into WeWork because they want this flexibility around the workspace.

So I do think that's kind of an interesting narrative that's kind of changed the fortunes for WeWork. And really, we're looking at what is essentially a real estate company kind of going back to its core. At least on its initial date, it's doing really well.

ZACK GUZMAN: Yeah, and it's one of those names that clearly had to rethink things in their rollout plan. And I think that's why we're seeing so many companies come out now, because the window's open. The window is wide open. I don't think we've seen a window like this in a long time. Not to say Portillo's doesn't deserve the 50% pop we're seeing, but there is a lot of enthusiasm around some of these consumer facing names to get out there.

I don't know if that necessarily is also fueling the move that we're seeing here in this Trump attached SPAC now when it comes to Digital World Acquisition Corp., and the idea of all of the network and his fans, followers. Of course, we've talked a lot about the way that he's not on Twitter anymore after the company banned him or suspended the account and continued to keep that in place permanently for the time being. You've got the opportunity now in terms of him launching his own social media company. And we've seen a lot of questions around SPACs and whether or not they live up to the hype.

And I think we are seeing that play out maybe in today's session as we're seeing shares in that SPAC jump 170% off of the news that they're partnering there with Trump's Truth Social. So that is an interesting move. And both of them, all of them, regardless, these are different-- we've got a workplace company, we've got a hot dog company, and we've got a potential social media SPAC here. So all of them might point to a lot of enthusiasm in a lot of different sectors.