Shares of the new company that plans to publicly list former U.S. President Donald Trump's blank check acquisition company soared again on Friday as small investors talked up the stock on message boards.
Digital World Acquisition Corp's shares nearly doubled to US $91 in heavy premarket trading, reminiscent of the meme stock frenzy earlier this year when an army of retail investors coordinated on online forums to drive shares of GameStop Corp and other heavily shorted stocks.
SPAC Digital World soared nearly five times in value to a market capitalization of US $1.5 billion in the previous session on news it would merge with Trump's media company to create a social media app called TRUTH Social.
Retail investors bought US $4.45 million worth of digital world shares on Thursday, while the total turnover from individual investors was nearly 10 times at US $45 million, according to data from analytics firm Vanda Research.
There's a tremendous amount of Trump supporters in the country who are going to just clamor to get some exposure to Donald Trump in whatever way they can, said Eric Diton, managing director of investment advisory firm The Wealth Alliance.
Data from brokerage Fidelity showed Digital World was the most traded stock on its platform on Thursday, with buy orders outnumbering sell 1.4 - to - 1.
It was also the most discussed stock on trading-focused social media site Stocktwits, a platform commonly seen as a measure of interest by retail investors. Message volumes on Stocktwits related to the SPAC were up more than 9,000 per cent.
No matter your politics this stock will rip I'll start my pick up at a meager 100 shares and then add to my position on dips, a Reddit user wrote.
Social media giants suspended Trump's accounts after his supporters rioted at the U.S. Capitol on Jan. 6. More than 17.5 million shares of the SPAC traded by 8: 30 a.m. ET on Friday, compared with its moving average volume of 145,766 shares in 10 days.
Hedge funds that invested in Digital World are set to make five times their investment, regulatory filings showed, while Patrick Orlando, who backs the SPAC is likely to see a US $420 million windfall from the surge in shares.