- Digital World Acquisition soared more than 300% on Thursday after it announced a SPAC deal with Donald Trump’s recently formed media company.
- But the move didn’t sit well with some investors, including Saba Capital, which invested in the SPAC prior to the deal announcement.
- Saba Capital sold its more than 2 million share stake early Thursday, missing out on a bulk of the gains.
Shares of Digital World Acquisition, the SPAC that plans to merge with Donald Trump’s newly-announced media company, soared more than 300% on Thursday.
But one hedge fund that was already invested in the SPAC prior to the deal announcement sold its more than two million shares shortly after the deal was announced, citing a conflict in values.
Saba Capital, a $US3.5 ($AU5) billion hedge fund run by Boaz Weinstein, told the New York Times that after learning of the Trump deal, his firm sold most of its stake in Digital World in the early morning. Saba Capital owned 2.4 million shares of Digital World, and likely owned public warrants in the SPAC, which soared more than 2,000% on Thursday.
“Many investors are grappling with hard questions about how to incorporate their values into their work,” Weinstein said. “For us, this was not a close call.”
While the firm did make a profit, it missed out on big gains as shares of Digital World soared throughout the afternoon and at one point was up as much as 412%. Six other hedge funds that are invested in Digital World saw peak paper profits of more than $US100 ($AU134) million on Thursday, assuming they didn’t sell their position as Saba did.
Those gains were even higher on Friday, with shares of Digital World soaring an additional 81% in early morning trades.