For anyone following the stocks with ties to former President Donald Trump, commonly called “Trump trades,” yesterday was interesting. When Trump insider Brad Parscale tweeted about a virtually unknown company called AiAdvertising (OTCMKTS:AIAD), the penny stock shot up instantly. This pattern was reminiscent of the October 2021 rise of Digital World Acquisition (NASDAQ:DWAC), the blank-check company that rose to fame after agreeing to merge with Trump Media and Technology Group (TMTG). Today, AIAD is still rising, but the other Trump stocks are moving in the opposite direction. This raises plenty of questions for investors.
What’s Happening With Trump Stocks
When DWAC rose to prominence, it illustrated a fact that investors could not ignore — Donald Trump has tremendous power in markets. Since then, we’ve seen CF Acquisition (NASDAQ:CFVI) receive the same treatment after agreeing to merge with conservative video-sharing platform Rumble. And while we’re getting closer to the highly anticipated rise of Truth Social, the former president’s social media platform, today’s market momentum has not moved in favor of the Trump stocks.
AIAD’s growth trend is continuing into today. Less than 24 hours after bursting onto Wall Street’s radar, the advertising tech company is up 14% on the day. Though it dipped within today’s first hour of trading, it has since rebounded. Yesterday’s gains have the stock up by more than 91% for the week.
However, that’s where the good news for Trump stocks ends. Pack leader DWAC is down 5% to start the day after a week of upward mobility. CFVI has seen a turbulent morning and is in the red by 0.39% at the time of writing. Today has been worse for Phunware (NASDAQ:PHUN), a software producer used by Trump’s 2020 campaign. After rising alongside the other Trump stocks yesterday, PHUN is down 8% as of this writing. All three stocks remain in the green for the week.
Why It Matters
The overachieving theme of Trump stocks’ performance today seems to be that market momentum is working against them. This is hardly unexpected. Stocks moving in solidarity is a door that swings both ways. Investors must account for the underlying fact that sometimes the door will not swing in their favor. There is, however, another important factor to consider.
It’s well established that the momentum behind the launch of Truth Social will be significant. It already has been, hence the unprecedented growth that Wall Street witnessed from DWAC when the venture was first announced. The actual launch is facing many roadblocks, though. The initial announcement claimed it was slated to go live in February 2022, but recent reports suggest that it may be delayed. Last week, the Washington Post reported that the platform was still months away from its launch. A former Trump administration insider recently indicated that the launch may be so far away that the former president may be more likely to join Gettr, another far-right social media platform.
As is often the case with Trump, the themes of uncertainty and dysfunction reign supreme. And while Wall Street may love the buzz around the Trump stocks, it does not love either of those things.
What It Means
The Trump stocks have been nothing if not volatile throughout recent months. The launch of Truth Social, though, is a catalyst upon which they are all dependent. If it is further delayed, it will pose further problems for investors.
For now, all we can do is wait and see. Investors should pay special attention to AIAD stock but proceed with caution. The stock trades at microcap levels, and its history is checkered.
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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.
