U.S. Markets

Rally in Trump-linked stocks fades after social media venture reveals regulatory inquiries

2 minute read

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

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Dec 6 (Reuters) - Early gains in a handful of companies tied to former U.S. President Donald Trump's social media venture fizzled out on Monday after the blank-check firm taking it public said it had received fact-finding inquiries from financial regulators.

Digital World Acquisition (DWAC.O) fell 2.9% after gaining as much as 22.3% in premarket trading.

The company said on Monday regulators had sought documents relating to communications between the blank-check firm and Trump's social media venture and other details. read more

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Shares of Digital World and other related stocks had rallied earlier after Trump's new social media venture said on Saturday it had raised nearly $1 billion. read more

SPAC CF Acquisition Corp VI (CFVI.O), which is taking video platform Rumble Inc public, rose 10.8% after jumping as much as 30% on Monday. Trump joined Rumble's platform in June. read more

Phunware (PHUN.O), hired by Trump's 2020 Presidential re-election campaign to build a phone app, fell 2.7%.

"You're going to continue to find that these rallies are short lived for the simple reason that we're not in the type of market environment where people are speculating and taking as many risks as they were two or three months ago," said Dennis Dick, a trader at Bright Trading LLC.

The hype around the Digital World merger in October sent Phunware and Remark Holdings (MARK.O) in a rally that traders have compared to this year's meme-stock frenzy. read more

Remark Holdings has been linked to Trump on social media forums, but Reuters could not independently verify the link between Trump and Remark Holdings yet.

CF Acquisition was the second-most traded stock on the Nasdaq, with more than 44 million shares traded, while investors traded 3.7 million and 5.1 million shares of Digital World and Phunware as of 1536 GMT.

Both Digital World and CF Acquisition were among the top trending stocks on investor-focused social media site Stocktwits.com.

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Reporting by Bansari Mayur Kamdar and Anisha Sircar in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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