| 24 May 2024, Friday |

Trump-linked stocks get a boost after social media venture raises $1 bln

Shares of a slew of firms related to former US President Donald Trump soared in premarket trade on Monday, as his new social media company announced it had received over $1 billion from an unnamed group of investors.

The stock of Digital World Acquisition Corp (DWAC.O), the blank-check acquisition business that aims to take Trump Media & Technology Group Corp public, increased by more than 9%.

CF Acquisition Corp VI (CFVI.O) increased by 21%, while Phunware (PHUN.O) increased by 2%.

Phunware was recruited by Trump’s re-election campaign in 2020 to create a phone app and SPAC. CF Acquisition Corp VI recently revealed intentions to list Rumble Inc, a Canadian video platform Trump joined in June.

The buzz around Digital World’s merger with Trump Media & Technology Group in October propelled Phunware and Remark Holdings on a surge comparable to this year’s meme-stock craze, when individual investors flocked into firms such as GameStop (GME.N), causing periods of high volatility. more info

“The market appears to be comfortable with speculation: What are they going to do with that billion dollars of cash? Who are they planning to purchase? Who could they possibly acquire?” said Thomas Hayes, managing member of New York-based Great Hill Capital LLC.

“And, for the time being, the market appears to like that.”

Digital World and CF Acquisition were both among the top trending stocks on the investor-focused social media site, indicating retail interest in the firms.

“There’s never any fundamental research that you can apply to these sorts of companies, which are typically driven by essentially chatroom related moves,” Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey, said.

Trump Media & Technology Collection Corp said on Saturday that it has reached agreements with “a diversified group of institutional investors” to fund nearly $1 billion through a private investment in public equity (PIPE) transaction as it prepared to list on the New York Stock Exchange.

  • Reuters