Most Read by Bloomberg The special-purpose buyout firm rallied 66% in its biggest one-day advance since the initial spike when the merger was announced, as millions of shares changed hands. Warrants linked to the SPAC rose 125% to $9.30, while Phunware Inc., a software company that worked on Trump’s re-election campaign, rose 38% and video platform Rumble Inc. increased 3.8%. Rumble says it’s “designed to be immune to culture cancellation” and has a deal with Trump Media & Technology Group. Digital World’s gains accelerated as the session continued as more than 32 million shares changed hands, nearly 33 times the activity seen on average over the past month. Options volume outpaced the stock’s put volume by more than 2:1, with the $30-strike calls expiring on Nov. 11 and Nov. 18 the most actively traded. The gains for Trump-linked companies came after he repeated his boast that he is ahead in the polls for the GOP nomination. Trump plans to announce his 2024 campaign during the week after the U.S. midterm elections, people familiar with the matter told Bloomberg. Digital World has been volatile as the SPAC’s sponsors fail to sway the retailer’s core base to vote on a deadline extension for its merger with Trump Media & Technology Group. Shares fell 70% from a year ago through Friday’s close, amid weak demand for Truth Social and as investors weigh how Twitter Inc.’s market will fare. from Elon Musk could affect its future. The story continues The stock has been a favorite among the retail crowd since the pledge was announced last year. While their market has slowed, they have led the SPAC to be the top performer of its kind. With Monday’s rise, it is trading at a premium of more than 185% to the $10.20 holders would receive if the deal collapses. “Any Trump news is going to boost interest,” said Matthew Tuttle, managing director of Tuttle Capital Management. “If Trump becomes president again, that could be good for DWAC, at least in the short term. In the long run, we have to figure that if his enemies are out to get him, then something related to DWAC might be low-hanging fruit.” Retailers were actively discussing the Digital World on Monday. Its index was trending on Stocktwits and was among the most mentioned companies on Reddit’s WallStreetBets forum, rivaling mentions of the beloved Tesla Inc. from retailers. Despite the trading, trading was moderate among Fidelity clients with buy orders barely outpacing sells. Short covering could also lead to partial strength, an action where investors close out some of their negative bets as stocks move higher. Almost 13% of Digital World’s shares available for trading are currently sold short, according to data from S3 Partners. (Updates stock movement throughout.) Most Read from Bloomberg Businessweek ©2022 Bloomberg LP
