Reuters sinks shares in a blank-check company linked to Trump’s social enterprise

Reuters. File photo: Former United States President Donald Trump addresses a rally on October 9, 2021, at the Des Moines, Iowa States Fairgrounds in the United States. REUTERS / Rachel Mummey

By Sinéad Carew

(Reuters) – Shares in Digital World Acquisition Corp, a blank-check firm that plans to publicly list former US President Donald Trump’s new social media venture, lost nearly a third of their value on Tuesday, the second consecutive daily fall since a steep rally. Last week.

The stock closed 29.6% lower at $ 59.07 between $ 55.50 and $ 91.35 during the session. The company was pullback after an 845% rally last week after first joining publicly with Trump.

Market analysts liken Digital World’s stock trading to this year’s meme-stock frenzy, as individual investors pile up on stocks such as Gamestop (NYSE 🙂 and AMC Entertainment (NYSE :), sparking intense volatility.

Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago, assists, “It’s a very simple monetary function and a market full of liquidity. Whether it’s AMC or a SPAC of your choice, traders are just chasing things.”

Referring to the acquisition of Digital World, he said: “There is no fundamental reason to own it at the moment. There are psychological reasons.”

On Friday, DWAC closed at $ 94.20, up 107% after hitting a session high of $ 175 after gaining 356.8% in the previous day’s session.

It fell 11% on Monday, the same day short-seller Iceberg Research said it was betting against the company.

Of the only 40 million shares traded on DWAC on Tuesday, more than the company’s 22.8 million free-float, but below last week’s trading volume of 498.8 million on Thursday, the stock’s highest volume session, according to Refinitive.

Other stocks associated with the former Republican president also fell on Tuesday. Shares of Phunware, a company hired by Trump’s 2020 presidential campaign to create a phone app, recently fell 39.2% to 35 4.35 after submitting for a $ 4.85 million at-the-market (ATM) equity program.

On Friday, the stock rose nearly 1,500% to 1 24.04 before ending the session at 7 8.74.

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