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Shares dive in blank-check company linked to Trump social venture

By Reuters

<div> <p>By Sinéad Carew</p> <p> -Shares in Digital World Acquisition Corp, the blank-check company that plans to publicly list former U.S. President Donald Trump’s new social media venture, lost almost a third of their value on Tuesday, a second straight daily decline after a steep rally last week.</p> <p>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 followed a 845% rally last week after the company was linked publicly to Trump for the first time.</p> <p>Market specialists have compared the trading in Digital World’s shares to this year’s meme-stock frenzy, when individual investors piled into stocks such as GameStop and <span class="caps">AMC</span> Entertainment, spurring bouts of intense volatility. </p> <p>“It’s a function of very easy monetary policy and a market that’s awash with liquidity. Whether its <span class="caps">AMC</span> or a <span class="caps">SPAC</span> of your choice, traders are just chasing stuff,” aid Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.</p> <p>Referring to Digital World Acquisition he said:“There’s no fundamental reason to own it at this point. There’s the emotional reason.”</p> <p>On Friday <span class="caps">DWAC</span> had risen 107% to close at $94.20 after hitting a session high of $175 following a 356.8% gain in the previous day’s session.</p> <p>It fell 11% on Monday, the same day that short-seller Iceberg Research said it was betting against the company.</p> <p>On Tuesday just under 40 million shares changed hands in <span class="caps">DWAC</span>, higher than the company’s 22.8 million free float, but well below trading volume of 498.8 million on Thursday last week, the stock’s peak volume session so far, according to Refinitiv. </p> <p>Other stocks linked to the former Republican president also tumbled on Tuesday. Shares of Phunware, a company hired by Trump’s 2020 Presidential reelection campaign to build a phone app, were recently down 39.2% at $4.35 after it filed for a $48.5 mln at-the-market (<span class="caps">ATM</span>) equity program. </p> <p>On Friday, the stock soared nearly 1,500% to $24.04 before finishing session up 471% at $8.74. </p> </div>