(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, 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.
“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.
(Reporting by Bansari Mayur Kamdar and Anisha Sircar in Bengaluru; Editing by Saumyadeb Chakrabarty)
