Shares of the blank-check acquisition company that plans to publicly list former U.S. President Donald Trump's new social media company soared again on Friday, but trading was halted multiple times due to volatility with small investors talking up the stock on social media.
The shares of Digital World Acquisition Corp were last up US $162.7 per cent 162.7 per cent at US $119.52 after hitting a high of US $175.
The moves on Friday and Thursday were 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.
The special purpose acquisition company SPAC Digital World had soared more than 300 per cent on Thursday, giving it a market capitalization of almost US $1.5 billion on news it would merge with Trump's media company to create a social media app called TRUTH Social.
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. A little over an hour into the free session more than 54 million shares had changed hands, already surpassing the regular float of 22.8 million shares based on Refinitiv data.
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.
Hedge fund manager Boaz Weinstein said that he sold his firm Saba Capital Management's holdings in Digital World Acquisition Corp. early Thursday as news emerged that it was merging with Trump's new media venture.
I knew that for Saba the right thing was to sell our entire stake of unrestricted shares, which we have now done, Weinstein said in a statement. Many investors are grappling with hard questions about how to incorporate their values into their work. For us, this was not a close call, the statement continued.