Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

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

Published 2021-12-06, 08:52 a/m
Updated 2021-12-06, 10:45 a/m
© Reuters. FILE PHOTO: Former President Donald Trump speaks to his supporters during the Save America Rally at the Sarasota Fairgrounds in Sarasota, Florida, U.S. July 3, 2021. REUTERS/Octavio Jones/File Photo

© Reuters. FILE PHOTO: Former President Donald Trump speaks to his supporters during the Save America Rally at the Sarasota Fairgrounds in Sarasota, Florida, U.S. July 3, 2021. REUTERS/Octavio Jones/File Photo

(Reuters) - Shares of a clutch of companies linked to former U.S President Donald Trump rose in premarket trading on Monday, after his new social media venture said it had raised nearly $1 billion from a group of unidentified investors.

Digital World Acquisition Corp, the blank-check acquisition firm that plans to take Trump Media & Technology Group Corp public, rose more than 9%.

CF Acquisition Corp VI jumped 21%, while Phunware was up 2%.

Phunware was hired by Trump's 2020 Presidential re-election campaign to build a phone app and SPAC CF Acquisition Corp VI recently announced plans to list Canadian video platform Rumble Inc, which Trump joined in June.

The hype around Digital World's merger with Trump Media & Technology Group in October sent Phunware and Remark Holdings in a rally that market specialists have compared to this year's meme-stock frenzy, when individual investors piled into stocks such as GameStop (NYSE:GME), spurring bouts of intense volatility.

"It looks like ... the market is fine with speculating: What are they going to do with that billion dollars of cash? Who are they going to buy? Who could they acquire?" said Thomas Hayes, managing member, Great Hill Capital LLC, New York.

"And the market seems to like that in the short term."

Both Digital World and CF Acquisition were among the top trending stocks on investor-focused social media site Stocktwits.com, highlighting retail interest in the companies.

© Reuters. FILE PHOTO: Former President Donald Trump speaks to his supporters during the Save America Rally at the Sarasota Fairgrounds in Sarasota, Florida, U.S. July 3, 2021. REUTERS/Octavio Jones/File Photo

"There's never any fundamental analysis that you can apply to these types of stocks, which are often driven by essentially chatroom related movements," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

Trump Media & Technology Group Corp said on Saturday it had entered into agreements to raise about $1 billion through a private investment in public equity (PIPE) transaction from "a diverse group of institutional investors", as it prepares to float in the U.S. stock market.

Latest comments

Bag holder lining up
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.