Three stocks with links to former President Donald Trump rose on Friday after CNN was informed by two persons with knowledge of the matter that Trump had been indicted on 30 charges of corporate fraud by a Manhattan grand jury.
It is unknown why investors sent shares of these corporations rising on Friday, but when Trump makes news, equities tend to spike and fall.
The shares of Digital World Acquisition Corp., the company seeking a merger with Trump’s media company, increased by 10% on Friday. Phunware (PHUN), the business that produced the 2020 presidential campaign mobile app for the Trump campaign, gained 3%. And Rumble (RMBL), a conservative video platform that collaborates with Trump’s Truth Social app, increased by 3% as well.
Historically, when Trump has been in the limelight, the stock market has fluctuated dramatically. For instance, DWAC shares rose after the Republicans gained the House of Representatives in November 2022, but have since declined by 55%.
In October 2021, DWAC announced plans to buy Trump Media & Technology Group, the owner of the Truth Social app. The former president is TMTG’s chairman and a significant stakeholder. The acquisition between DWAC and TMTG did not materialize, however, as a shareholder vote on the transaction was repeatedly postponed until eventually failing in September 2022.
It’s not obvious what prompted investors to buy up these companies’ stock on Friday, but they tend to see wild price swings whenever
In addition to judicial investigation, the contentious merger has been halted. In addition to the SEC, the Justice Department is examining the deal. Late in June, Digital World disclosed that its board members were subpoenaed by a federal grand jury in the Southern District of New York in relation to the deal’s due diligence.
Digital World stated that the federal investigations prevented the closing of the contract with TMTG. ARC Global Investments II placed roughly $3 million into the business’s trust account to exercise an option to unilaterally prolong the merger agreement, allowing the shell company to purchase further time despite the shareholders’ rejection of the TMTG acquisition.
If it hadn’t occurred, the entire transaction may have fallen apart, requiring Digital World to refund the almost $300 million it has raised. This cash will bankroll the merger with TMTG, the owner of Truth Social. A liquidation would have also posed a danger to the additional $1 billion raised by the Trump media firm.