Donald Trump’s new venture, which is aiming to launch a Twitter rival, made several big announcements this month, Forbes reports. First, the business said it struck agreements to raise $1 billion of cash. Second, it admitted that it was under investigation by the Securities and Exchange Commission. Third, it revealed that Devin Nunes, a loyal Trump ally in the House of Representatives, would be leaving Congress to become its chief executive.
Investors reacted with some caution, but more enthusiasm. On Dec. 6, shares trickled down 3%, possibly in response to news of the SEC investigation, which Sen. Elizabeth Warren had suggested the commission consider. The next day, the stock jumped 17%, as Trump fans seemed to focus on the cash injection and new hire. “Go away Pocahontas!,” one tweeted, borrowing Trump’s nickname for the senator. “You have no power here!” Shares soared another 28% the day after that, before eventually falling to their current $51. Overall, since the announcement, they’re up 13%.
The retail investors pushing up the price do not know what they are buying. Sure, they understand that they are investing in a SPAC rather than a traditional business. Traders still cannot purchase shares of Trump’s company, the Trump Media and Technology Group. They have no clue how many shares will exist in the company after the merger, which means they don’t know what percentage of the venture they are actually buying. Read more.
