Alex Wilhelm
Fri, October 22, 2021
When news broke that former U.S. President Donald Trump had conceived of a media and technology company and intended to take it public via a blank-check company, you would have been forgiven if you immediately began to wonder how quickly you could short the stock.
Pick a reason: Right-leaning social networks have largely flopped; the company appeared to be severely underfunded given the scope of its goals and the wealth of its rivals; the fact that there was no product available to use, let alone historical revenue to model forward. There are other reasons for skepticism, but those are my favorite.
And yet! Shares of the SPAC in question, Digital World Acquisition Corp, shot higher on the news. And it is repeating the feat this morning:
Recall that DWAC is the Class A share ticker symbol of Digital World Acquisition Corp, while DWACU is the same equity, but with half a warrant attached. The latter shares are up less, which is a bit odd.
Regardless, DWAC now sports a market cap of around $4.7 billion, per Yahoo Finance. That means that Digital World -- aka Trump Media and Technology Group (TMTG) -- is something akin to the newest unicorn to come out of the land of media and tech. Sure, it's a public price, but because the company that will merge with Digital World is so nascent as to be risible: Fuck it, let's call it a startup.
None of this makes sense. Even by the standards of 2021 and the SPAC era, this is all very stupid.
The only thing that TMTG has that makes it anything other than hot air attached to tissue-thin market statistics -- we'd like to thank the company's presentation for reminding us that podcasts are rising in popularity, a truly mind-bending insight -- is Trump's name. Recall that TMTG intends on using SPAC money to fund its operations, not Trump cash; it doesn't even really have the financial backing of the man whose name is atop its business. You know, the supposed billionaire.
Perhaps the fact that the company is so silly should have tipped us off to it becoming a memestock, or stonk. Why? Because only the wackiest companies seem to make the cut. Physical retail is falling amid rising digital delivery of gaming goods? Let's send GameStop to the moon. No one is renting cars? Let's pile into Hertz stock. That sort of thing.
So, almost, of course DWAC is going vertical. Why not?! This stock shooting higher is at once utterly hilarious and a grim indictment of efficient market theory. Nothing makes a stonk better as a meme than it making little to no sense as a business. Thus, TMTG is up a kajillion percent, which makes sense precisely in how little sense it makes.
Normally I'd just go to bed at this point, but it turns out I have a lot of work to do so, we'll leave this here for now. Good luck to everyone trading today.
[stäNGk]
*1998 Yahoo refuses to buy Google for $1 million
*2002 Yahoo realizes it’s mistake, tried to buy Google for $3 billion, Google wants $5 billion, Yahoo says no
*2008 Yahoo refuses to be sold to Microsoft for $40 billion
*2016 Yahoo sold to Verizon for $4.6 billion
CEO of Yahoo: “Stonks”
*2002 Yahoo realizes it’s mistake, tried to buy Google for $3 billion, Google wants $5 billion, Yahoo says no
*2008 Yahoo refuses to be sold to Microsoft for $40 billion
*2016 Yahoo sold to Verizon for $4.6 billion
CEO of Yahoo: “Stonks”
What We Talk About When We Talk About Stonks
BY JORDAN WEISSMANN
This is not the first time stonks, the word, has had a moment. According to the sleuths of Know Your Meme, it first emerged on Facebook in 2017. The image of a generic business dude with a 3D-rendered head standing in front of a ticker with a giant arrow pointing up, with its suggestion of empty-headed overconfidence, became a popular template for jokes about dumb life and money decisions. (Buy a $10 scratch card and win $5? Stonks! Lose your shirt on Bitcoin? Stonks! Some guy actually tried to trade a kidnapped baby for Big Macs? Stonks!). But mostly, it was just a funnier way to say the word stocks that caught on with people who spend too much of their time on the internet, like Redditors or Elon Musk, who gave the term a big boost with a tweet in 2019.
Interest in stonks also surged in March of last year when the coronavirus was kicking into high gear and the market dropped like a rock. Speaking completely from personal observation, it’s been seeping further into common parlance ever since. I’m an economics writer, and sometimes colleagues or friends make the mistake of asking me for insights on investing. My usual response over the last few months has been to say, “I’m not much of a stonks guy.”
The crucial thing about stonks is that it sounds goofy. The proper word stocks is polite and almost patrician with its wide-open “aw” syllable. You can practically yawn it. Stonks, in contrast, is an exclamation, a honk of joy or incomprehension that signals that you don’t take any of this finance stuff too seriously, that you are in it as much for the lulz as the opportunity to actually make a buck. It fits the mentality of day traders who see themselves as party crashers screwing with Wall Street, make memes comparing themselves to the Joker or the Avengers, and might brag about purposely buying shares in a company just as it’s about to crash, as if they were purposely getting kicked in the balls on an episode of Jackass.
But the phrase has also caught on because it matches the sense of absurdity that actual professionals often feel about the world of investing. If you try hard enough, it’s possible to make sense of the stock market. Sometimes. There are moments where it’s obvious what’s happening: A company craps out on earnings, and its price falls. There’s a pandemic and so everyone buys shares of Peloton and Zoom.* The Federal Reserve signals interest rates will stay low, so stocks pop. The best reporters who cover equities also know how to trace the shrouded mechanisms that drive the action on some days, and the obscure, algorithm-driven hedge fund strategies that can snowball into a route or just quietly skim cash until someone or another is a billionaire.
But on many days, maybe most days, stocks go up or stocks go down and people are left to make up a rationale for it all, to try and impose a narrative where not much of one may actually exist. On those afternoons, the most honest thing to do is just throw up your hands and post the stonks guy meme. And at a moment that the markets are being overrun, for better or worse, by posters who’ve basically dedicated themselves to shredding the idea that markets are efficient, rational mechanisms for allocating capital and discovering value, tweeting about stonks seems far more appropriate than discussing something as reasonable and comprehensible as stocks. It’s an emotional onomatopoeia for talking about people throwing their money at the market when, lol, nothing matters.
JAN 28, 2021
A cry for our age. Special Meme Fresh
Americans don’t own stocks these days. They own stonks.
The purposeful misspelling, long a throwaway joke among market obsessives and memelords, has suddenly become ubiquitous as the entire worlds of media, finance, politics, and internet shitposters have intersected over the gyrations of GameStop, all thanks to a plucky, hilariously reckless band of Redditors who’ve pumped the stock’s price skyward to make bank while blowing up some hedge funds that had bet against the ailing retailer, and that are now crying betrayal at the day trading app Robinhood after it cut the action off. #Stonks are all anybody can talk about on Twitter, where it’s become the hashtag of choice for everyone following the escapades, a six-letter shorthand for the absurdity and excitement of the moment. Searches for the phrase have shot up. The original meme (see above!) is everywhere. The stonks man cometh.
Americans don’t own stocks these days. They own stonks.
The purposeful misspelling, long a throwaway joke among market obsessives and memelords, has suddenly become ubiquitous as the entire worlds of media, finance, politics, and internet shitposters have intersected over the gyrations of GameStop, all thanks to a plucky, hilariously reckless band of Redditors who’ve pumped the stock’s price skyward to make bank while blowing up some hedge funds that had bet against the ailing retailer, and that are now crying betrayal at the day trading app Robinhood after it cut the action off. #Stonks are all anybody can talk about on Twitter, where it’s become the hashtag of choice for everyone following the escapades, a six-letter shorthand for the absurdity and excitement of the moment. Searches for the phrase have shot up. The original meme (see above!) is everywhere. The stonks man cometh.
This is not the first time stonks, the word, has had a moment. According to the sleuths of Know Your Meme, it first emerged on Facebook in 2017. The image of a generic business dude with a 3D-rendered head standing in front of a ticker with a giant arrow pointing up, with its suggestion of empty-headed overconfidence, became a popular template for jokes about dumb life and money decisions. (Buy a $10 scratch card and win $5? Stonks! Lose your shirt on Bitcoin? Stonks! Some guy actually tried to trade a kidnapped baby for Big Macs? Stonks!). But mostly, it was just a funnier way to say the word stocks that caught on with people who spend too much of their time on the internet, like Redditors or Elon Musk, who gave the term a big boost with a tweet in 2019.
Interest in stonks also surged in March of last year when the coronavirus was kicking into high gear and the market dropped like a rock. Speaking completely from personal observation, it’s been seeping further into common parlance ever since. I’m an economics writer, and sometimes colleagues or friends make the mistake of asking me for insights on investing. My usual response over the last few months has been to say, “I’m not much of a stonks guy.”
The crucial thing about stonks is that it sounds goofy. The proper word stocks is polite and almost patrician with its wide-open “aw” syllable. You can practically yawn it. Stonks, in contrast, is an exclamation, a honk of joy or incomprehension that signals that you don’t take any of this finance stuff too seriously, that you are in it as much for the lulz as the opportunity to actually make a buck. It fits the mentality of day traders who see themselves as party crashers screwing with Wall Street, make memes comparing themselves to the Joker or the Avengers, and might brag about purposely buying shares in a company just as it’s about to crash, as if they were purposely getting kicked in the balls on an episode of Jackass.
But the phrase has also caught on because it matches the sense of absurdity that actual professionals often feel about the world of investing. If you try hard enough, it’s possible to make sense of the stock market. Sometimes. There are moments where it’s obvious what’s happening: A company craps out on earnings, and its price falls. There’s a pandemic and so everyone buys shares of Peloton and Zoom.* The Federal Reserve signals interest rates will stay low, so stocks pop. The best reporters who cover equities also know how to trace the shrouded mechanisms that drive the action on some days, and the obscure, algorithm-driven hedge fund strategies that can snowball into a route or just quietly skim cash until someone or another is a billionaire.
But on many days, maybe most days, stocks go up or stocks go down and people are left to make up a rationale for it all, to try and impose a narrative where not much of one may actually exist. On those afternoons, the most honest thing to do is just throw up your hands and post the stonks guy meme. And at a moment that the markets are being overrun, for better or worse, by posters who’ve basically dedicated themselves to shredding the idea that markets are efficient, rational mechanisms for allocating capital and discovering value, tweeting about stonks seems far more appropriate than discussing something as reasonable and comprehensible as stocks. It’s an emotional onomatopoeia for talking about people throwing their money at the market when, lol, nothing matters.
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