Weinstein’s Saba Capital sold holdings in SPAC as shares surged on Trump deal

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Oct 22 (Reuters) – Two early traders in blank-check firm Digital World Acquisition Corp. (DWAC.O) sold their holdings as news emerged that it was merging with former President Donald Trump’s new media enterprise.

Hedge fund supervisor Boaz Weinstein, who runs Saba Capital Management, and Lighthouse Investment Partners, mentioned that they had exited with out giving a exact time for the gross sales or value at which they cashed out.

“I knew that for Saba the right thing was to sell our entire stake of unrestricted shares, which we have now done,” Weinstein mentioned in a press release. The agency sold on Thursday.

Lighthouse mentioned on Friday that it had additionally sold.

“Lighthouse was not aware of the pending merger and no longer holds unrestricted shares of the SPAC,” the agency mentioned in a press release.

By definition, traders will not be permitted to know the merger goal after they make investments in a blank-check firm and so the affiliation with Trump got here as an entire shock, a number of traders mentioned.

Many on Wall Street distanced themselves from Trump following the storming of the U.S. Capitol on Jan. 6.

Trump Media and Technology Group and Digital World Acquisition Corp, a Special Purpose Acquisition Vehicle, mentioned this week they’d merge to create a brand new social media app known as TRUTH Social. Trump’s firm mentioned it plans a beta launch subsequent month and a full roll-out in the primary quarter of 2022.

Market response was swift with the inventory surging 357% on Thursday and racing up 129% in lively buying and selling on Friday.

As many traders are focusing extra on integrating environmental, social and governance elements into their investments, the blank-check firm’s affiliation with Trump sparked some rethinking.

“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 mentioned in the assertion.

Weinstein declined to say how a lot capital he had dedicated initially and the way a lot of a revenue he might have made on Thursday when the shares surged. He additionally declined to say how his personal traders might have reacted to the choice to exit.

Weinstein’s fund manages roughly $3.5 billion and he rose to prominence by betting in opposition to the JP Morgan Chase dealer identified as the “London Whale”. He has donated to Democratic candidates in the previous, supporting President Joe Biden’s candidacy final yr.

His spouse, Tali Farhadian Weinstein, a former federal prosecutor, ran for Manhattan district lawyer this yr however misplaced in the Democratic major to Alvin Bragg. The workplace is investigating Trump.

Reporting by Svea Herbst-Bayliss; Editing by Nick Macfie and Philippa Fletcher

Boaz Weinstein, founder and chief investment officer at Saba Capital Management, speaks during the SALT conference in Las Vegas, Nevada, U.S. May 17, 2017. REUTERS/Richard Brian

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