Shares of Digital World Acquisition Corp, a blank-check company that plans to publicly list former US President Donald Trump’s new social media venture, lost nearly a third of their value on Tuesday, continuing after a sharp rally last week. Second fall.
The stock closed down 29.6% at $59.07, with its price swinging wildly between $55.50 and $91.35 during the session. The pullback comes after an 845% rally last week since the company was first publicly associated with Trump.
Market experts have compared trading in Digital World’s shares to this year’s meme-stock frenzy, when individual investors saw stocks like Gamestop and AMC Entertainment go through a period of huge volatility.
“It is a function of very easy monetary policy and a market full of liquidity. Whether it’s AMC or your SPAC of choice, traders are just chasing the stuff,” help Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
Referring to the Digital World acquisition, he said: “There is no fundamental reason to own it at the moment. There is an emotional reason.”
The DWAC was up 107% at $94.20 after hitting a high of $175 on Friday 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.
According to Refinitiv, only 40 million shares changed hands in DWAC on Tuesday, more than the company’s 22.8 million free float, but down from Thursday’s trading volume of 498.8 million last week, the stock’s peak volume session so far.
Other stocks belonging to the former Republican president also fell on Tuesday. Shares of Phunware, a company hired by Trump’s 2020 presidential election campaign to build the phone app, were 39.2% at $4.35 after it recently filed for a $48.5 million at-the-market (ATM) equity program. were down.
On Friday, the stock gained nearly 1,500% to $24.04 before ending the session up 471% at $8.74.
Disclaimer: This post has been self-published from the agency feed without modification and has not been reviewed by an editor
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