Krystal Hu and Anirban Sin

(Reuters] Donald Trump bought shares in his newly formed company to unite his critics and his supporters, in the hope of scoring a huge win.

Anthony Nguyen (a 49-year old software consultant living in Austin, Texas) is a Republican who refused vote for last year’s U.S. President.

Nguyen joined thousands of other online traders last week to drive up the price of the company, which will be home Trump’s next social media venture, to close at $12 billion. Nguyen, who said that he was only interested in making a quick profit and not believing in the company, hasn’t yet launched the company’s mobile app.

Is Trump’s social media network going to be successful? Most likely not. Nguyen stated that you don’t have to make any money while you wait.

Shares of Digital World Acquisition Corp have risen 842% since the blank-check acquisition company announced on Wednesday it would merge with Trump Media & Technology Group, which aims to launch a social media network called TRUTH Social.

Based on Friday’s closing price for Digital World shares, Trump Media was valued at $8.2B. The company created by the merger would value close to $12B. As is the norm for SPACs (special purpose acquisition companies), Digital World values its share in this deal at $10. This week, a detailed regulatory filing will be made that will enable a precise calculation.

The majority of investors who bought the shares were supporters of Trump or political sympathizers. Shane Springer is a salesman, aged 28, from Norristown. He bought the stock on Robinhood’s trading platform (NASDAQ:). The stock will remain his property until the “moon”. He purchased the stock for $13 but refused to give them up even at a $175 high last Friday.

Trump has a long history of winning and making money. Springer stated that if this were an election, I would have lost. But it isn’t, it’s business.

Nguyen said that he was interested in SPAC due to the similarities. GameStop Corp (NYSE:), videogame retailer, whose stock shares rocketed in January following a slew of Reddit investors betting against it. These retail investors also invested in other “meme”, stocks such as AMC Entertainment (NYSE 🙂 Holdings Inc or home supply retailer Bed Bath & Beyond Inc (NASDAQ)

Digital World shares weren’t under the pressure of hedge funds that were shorting them, which is unlike GameStop and other meme stocks. Nguyen stated that he noticed the same enthusiasm among retail investors for Trump’s deal.

Digital World shares cost $4,100. He purchased half the shares for $41,800, and sold the other half for $4,800. The stock traded at $96, which was an average of $41 per share. When the stock hit $120, it reached $3,000, with a quarter selling for $3,000 There are 25 remaining shares.

Nguyen stated that people like to jump and are agile enough to get in and double their money before getting out.

Representatives for Trump Media and Digital World didn’t immediately reply to inquiries about investor reactions to the deal.

Investors may be looking to find other stocks that might benefit from the buzz. Sam Nita, 36, was a Portland-based construction worker who invested $2800 in Digital World. He also purchased $1,368 from U.S. software company Phunware Inc. Phunware Inc worked on Trump’s 2020 election app. After Phunware shares increased by 1,471% last Friday, Sam Nita learned about Phunware via trading app WeBull. This resulted in a $14,000 profit.

Nita, who supported Trump during his two previous elections, stated that everything MAGA (Make America Great Again), went insane just like Trump. I’m getting calls from friends that don’t do stocks and want to learn how to purchase this Trump stock.

Randall Crowder is Phunware’s chief operating officer. He told Reuters that he hoped Phunware’s excitement was due to the expectation of delivering “quarter over quarter growth in Phunware” and the fact it was developing a blockchain-based decentralized data economy.

HUGESPACING RALLY

The SPAC shares’ future direction is not something investors can predict, they say. Many investors found the presentation Trump Media published last week regarding its business plan, which was rich in ambitions but sparse on financial details, to be confusing.

People who believe the stock can go higher point out the massive social media following Trump before he was banned. He encouraged his followers to join the U.S. Capital attacks on Jan. 6. According to his presentation, he had 89 million Twitter followers (NYSE:), 33 millions on Facebook (NASDAQ;) and 24.5million on Instagram.

The stock’s investors are pointing out failures in right-wing social networking apps like Parler, which bearish investors see as a reason to be bearish. They argue that it is more probable that investors will buy at peak because of the Digital World share rally, which has been the largest ever for SPAC.

Before the Trump media deal, SPACs lost much of its luster among retail investors. After the ambitious financial projections of SPACs collapsed, many investors lost a lot.

Jay Ritter from the University of Florida, who is an expert on capital markets and finance, stated that investors face a lot of risk because Digital World or Trump Media could seek to renegotiate their deal due to the SPAC stock rally. This would allow them to retain more of the company at the expense of retail investors.

Ritter stated that the greater the stock price, the higher there is risk for investors.