Saba Capital is a New York-based hedge fund founded in 2009 by Boaz Weinstein. The fund manages around $3.5 billion in assets with a focus on credit-related investments. Recently, Saba Capital has been in the news due to its involvement with DWAC, the SPAC taking Donald Trump’s media company public. Saba Capital held 2.4 million shares of DWAC before the deal with Trump Media & Technology Group was announced. However, after the announcement, Saba Capital sold its unrestricted DWAC shares amidst the massive rally. This move highlights Saba Capital’s investment approach of locking in profits when opportunities arise.
Saba Capital originally held 2.4 million DWAC shares before the Trump deal announcement
According to filings, Saba Capital held around 2.4 million shares of DWAC as of June 30, 2021. This made Saba one of the largest institutional investors in DWAC before the announcement of the merger deal with Trump Media & Technology Group in October 2021. Other major DWAC institutional investors included Lighthouse Investment Partners, Highbridge Capital Management, and K2 Principal Fund. Saba Capital’s large position in DWAC shows that the hedge fund saw potential in the SPAC as a speculative investment before the Trump connection was made.
Saba Capital sold its DWAC shares after the stock surged on the Trump deal news
DWAC stock saw massive gains immediately after announcing its plans to take Trump’s new media company public. The stock traded as high as $175 per share, up over 800% from pre-announcement levels below $10. With DWAC surging, Saba Capital made the decision to sell its unrestricted shares to lock in profits, per filings. This move allowed Saba to capitalize on the short-term price spike driven by the Trump announcement. Other DWAC institutional investors like Lighthouse Investment Partners also sold shares amidst the rally.
The DWAC deal highlights Saba Capital’s opportunistic investment approach
Saba Capital’s involvement with DWAC underscores the hedge fund’s opportunistic investment style. The fund identified DWAC as a worthwhile speculative play before the Trump connection. When the Trump deal sent DWAC shares soaring, Saba Capital seized the chance to realize significant gains by selling its holdings. This type of agile investing, quickly moving in and out of positions, is a key part of Saba Capital’s strategy under founder Boaz Weinstein. The fund combines deep credit research with nimble trading to profit from market dislocations and temporary mispricings.
Saba Capital held a large position in DWAC before the Trump media deal announcement. It subsequently sold its DWAC shares to lock in profits from the massive post-announcement rally. This underscores Saba Capital’s opportunistic investment approach.