Home Politics Stocks Tied to Donald Trump Surge After Business Fraud Indictment

Stocks Tied to Donald Trump Surge After Business Fraud Indictment

Donald Trump related stocks

Three stocks with ties to former President Donald Trump saw a surge in their shares on Friday after news broke that he faces 30 counts of business fraud in an indictment from a Manhattan grand jury.

The reason for the increase in stock prices is unclear, but these stocks tend to experience wild fluctuations in response to news related to Trump.

Shares of Digital World Acquisition Corp., which is seeking to merge with Trump’s media venture, rose by 10%. Phunware (PHUN), the company that developed the Trump campaign’s mobile app for the 2020 presidential race, saw an increase of 3%, while Rumble (RMBL), a conservative video platform that partners with Trump’s Truth Social app, also rose by 3%.

These stocks have seen significant movement in response to news related to Trump in the past. For example, DWAC shares rose after Republicans won the House of Representatives in November 2022, although they have since fallen 55%.

The proposed merger between DWAC and Trump Media & Technology Group, owner of the Truth Social app, has been stalled by legal scrutiny and delays. The Justice Department and the SEC are investigating the acquisition, and the board members of Digital World have received subpoenas from a federal grand jury in the Southern District of New York in June 2022. The shareholder vote on the transaction was delayed several times before ultimately failing in September 2022.

Federal Probes Hinder Digital World’s Merger with TMTG

Despite the rejection of the merger by shareholders, Digital World has been able to maintain the possibility of the deal with TMTG due to a deposit made by ARC Global Investments II. The sponsor deposited nearly $3 million into the company’s trust account to exercise an option to extend the merger agreement unilaterally.

If this deposit had not happened, the entire deal would have fallen apart and Digital World would have been forced to return the roughly $300 million it raised to fund the merger with TMTG, the owner of Truth Social. A liquidation would have also put the additional $1 billion raised by the Trump media company at risk.

However, the federal probes into the acquisition have blocked Digital World’s ability to complete the deal with TMTG.

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Rochdi Rais is a senior editor and journalist that has been published in major publications.


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