Yesterday brought some news that set financial markets into a tailspin as former President Donald Trump announced that he was cashing in on the SPAC boom. While the launch of social network Truth Social is still a few months away, he shared that parent company Trump Media and Technology Group has entered into a tentative agreement to merge with Digital World Acquisition (NASDAQ:DWAC). This news turned the little-known company into a meme stock overnight, and now other companies such as Phunware (NASDAQ:PHUN) are moving in sympathy. This has PHUN stock shooting up today.
What’s Happening With PHUN Stock
It’s not a stretch to say that investors are having a fun day with PHUN stock as the software company shares rise in sympathy with DWAC.
As of this writing, shares are up 360% in just the first hours of trading. While DWAC shares began to move upward as soon as news of the merger discussion broke, PHUN slowly started to catch a ride up. Shares gained just over 50% on Thursday before taking off this morning.
What It Means
These market patterns prompt one central question: What is causing an enterprise software developer to move in sympathy with a black-check company connected to Trump? As it turns out, there is a connection.
Based in Texas, Phunware was one of the key developers of the Trump 2020 campaign app, working with Trump-insider group American Made Media Consultants. While nothing has been confirmed, retail investors are making the logical jump to assume Phunware will play a role in Truth Social.
Phunware is growing, and the company is clearly expecting to be busy in the year ahead. It recently acquired Lyte, a private company known for producing high-performance computers. While it’s hard to assess how much this deal has affected PHUN stock, it clearly has only been for the better so far.
Why It Matters
The recent growth that Phunware and Digital World Acquisition have experienced is a good reminder of the power that Trump possess. Just the speculation of an impending deal has been enough to send these stocks soaring to monumental heights.
DWAC has cemented its future as a meme stock, but if these trends continue, we may seen PHUN stock fall into the same category. It’s risen by over 300% in just a few hours on pure speculation. With that in mind, consider what an actual contract from a Trump company could do for it.
There’s a lot to be watching as the debut of Truth Social nears, but this morning’s events have made it clear that PHUN stock should be on the list.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.