NEW YORK (AP) — The company planning to bring President Donald Trump’s new media venture to the stock market soared for a second straight day on Friday.
Digital World Acquisition Corp. nearly tripled in the first minute of trading before trading in it was temporarily halted. That was the first of at least five time-outs given to the stock because of sharp swings in price. It was sitting on a 117.6% gain at $99, as of 10:30 a.m. Eastern time, after earlier climbing as high as $175.
A day before, the stock more than quadrupled to $45.50 from $9.96 after it said it would merge with Trump Media & Technology Group. The new venture, of which Trump is chairman, aims to challenge Facebook, Twitter and even Disney’s streaming video service.
Experts are split on the company’s prospects, but the surge in Digital World Acquisition’s price shows some investors are betting on it to be popular. That’s despite the deal’s announcement being unusual in how few details it offered for investors.
Some investors appear to be believers in Trump’s ideology, while others see a chance for the company to quickly gain a big audience. Others are simply looking for a quick profit.
Severl threads on Reddit’s WallStreetBets forum, where millions of traders share their successes and failures, had users bragging about big profits they made by jumping in and out of Digital World Acquisition. Others were asking if they should listen to the fear they were feeling of missing out.
Digital World Acquisition is a special-purpose acquisition company, something that’s typically called a SPAC or “blank-check” company. Its sitting on a little less than $300 million of cash that it raised in its own initial public offering, before it went looking for a company to acquire.
SPACs can offer privately held companies a quicker and easier way to get their stocks on an exchange, by merging with them. They were wildly popular earlier this year, but activity had been receding as regulatory scrutiny on them and interest in them dimmed, at least until Wednesday’s Trump-related announcement.
The last time Trump ran a publicly traded company, it didn’t end up well for investors. His casino company, Trump Entertainment Resorts, lost hundreds of millions of dollars over more than a dozen years and filed for bankruptcy several times, socking shareholders with big losses. Trump fared better. He took in $82 million in fees, salary and bonuses over the same period, according to Fortune magazine.