The other day, I read a blurb from Short Squeez about Joe Rogan, the one-man media empire. It immediately occurred to me that the good folks at Digital World Acquisition Corp. (NASDAQ:DWAC) ought to have hitched DWAC stock to Rogan rather than the permanently bent former President.

I continue to shake my head in amazement that smart investors would stand behind someone who’s perpetually suing other people. Donald Trump’s made a career out of turning his attack-dog lawyers on whomever he wants to get whatever he wants.

He is the ultimate man-child with absolutely no qualification to run a media empire. On the other hand, Rogan has already proven that he can talk with the best of them.

If you own DWAC, you will come to regret that Digital World CEO Patrick Orlando couldn’t land the Big Fish.

Here’s why.

DWAC Stock Has Nowhere to Go But Down

InvestorPlace’s Thomas Niel recently pointed out that the lockup provisions for Trump Media and Technology Group (TMTG) insiders are very favorable. Looking at the lockup agreement from the Oct. 20, 2021, regulatory filing, they could cash out as soon as 150 days after closing.

As for the institutional investors who committed $1.0 billion to the TMTG/DWAC private investment in public equity (PIPE) at the beginning of December. They’ll be able to convert their preferred stock at $33.60 a share, which is a 33% discount to its current share price.

The PIPE preferreds are also subject to a conversion price adjustment. The formula is a 40% discount against the volume-weighted average price (VWAP) for 10 consecutive trading days after the closing of the combination or $10, whichever is greater.

So, let’s say DWAC shares happen to fall to $30, and then the 10-day VWAP stays around $30, the PIPE investors will convert their preferreds to common at an exercise price of $18, not $33.60. Worse still, they can sell immediately after the combination closes.

That’s going to put severe downward pressure on its share price. Given this understanding, I wouldn’t touch DWAC at $50 if you paid me.

Back to Joe Rogan

I’ve never listened to his podcast. However, I would probably enjoy the one he did with Elon Musk in 2018. I’d also be very curious to listen to his October 2021 conversation with CNN’s Dr. Sanjay Gupta. Rogan’s suspicions that vaccines are overrated versus the medical professional’s understanding of why they work would make for an enjoyable listen.

Gupta wrote about Rogan after his appearance on the podcast, speaking to the former comedian’s ability to carry a conversation, something I’m confident the former President is incapable of.

“At a time when there is a desire for shorter, crisper content — responding to abbreviated human attention spans — one of the most popular podcasts in the country features conversations that last exceptionally long and go particularly deep,” Gupta wrote.

This brings me to the blurb in Short Squeez I mentioned in the opening paragraph.

It pointed out that Rogan’s podcast has 11 million viewers per show, according to Nielsen and Spotify, nearly four times as many as Tucker Carlson Tonight. On Jan. 2, Rogan asked his Twitter followers — an estimated 7.8 million — to download Gettr, a right-wing social media platform run by Jason Miller.

If you don’t remember Miller, he was a top aide to Trump and a man who doesn’t appear to have a neck. Upwards of 250,000 people downloaded the app on Jan. 2, more than any other day since launching in July 2021.

Short Squeez concluded:

“The Joe Rogan Experience is much bigger than just a podcast. It is its own medium. He has a young, loyal and global following. Mere mentions of people on his podcast can make stars out of them.”

Like I said, Digital World got the wrong media guy.

The Bottom Line

I’ve always found it hard to understand how people can separate their morals from their money. By that, I mean people like Jeff Bezos, who’s become the poster child for the poor treatment of low-paid employees.

The PIPE investors in this potential combination between TMTG and DWAC have tucked their personal feelings toward Donald Trump in their pockets to make a few bucks.

That’s their business. However, Digital World opting for Donald Trump is the lazy man’s version of deal sourcing. Joe Rogan is one example of a better media bet. Even Gettr seems like a safer play.

Time will tell if Patrick Orlando dropped the ball. My bet says he did.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.