Social media company Phunware (NASDAQ:PHUN) is up over 25% in pre-market trading as Donald Trump looked set to dominate the primaries on Super Tuesday. PHUN stock is up over 75% since yesterday’s close.
Phunware makes what it calls a “mobile experience platform,” but the software was originally written as a campaign app for Trump.
PHUN stock was trading at $16.12 per share as the market opened this morning. It traded for under $7 per share early on March 4. The market capitalization is still under $125 million, however.
Trump Stakes
Other stocks associated with the former president are also rising. Digital World Acquisition (NASDAQ:DWAC), which is taking the Truth Social network public, is up 7% overnight. Rumble (NASDAQ:RUM), which is building a version of YouTube tied to right-wing causes, rose 10% on March 4.
But as Phunware’s market cap shows, these are short-term speculative moves. Phunware underwent a 1-for-50 reverse split just last month. That means it now has fewer than 8 million shares outstanding. It doesn’t take a lot of action to move a small float. The small float and low market cap make it a perfect proxy to trade Trump’s chance of success, fellow InvestorPlace contributor Chris MacDonald writes.
Phunware is currently set to announce its fourth-quarter results on March 12. The company is expected to highlight its business with hotels.
Trumpist speculation could spread as his odds of victory rise. Goldman Sachs (NYSE:GS) says real stocks like construction giant Fluor (NYSE:FLR), steel company Vale (NYSE:VALE), and coal company Peabody Energy (NYSE:BTU) could rise in that event.
But if a rising tide lifts all boats, investors might want to look again at Black Rifle Coffee (NASDAQ:BRCC). This is a coffee chain with a right-wing bent located near military bases and in red-state suburbs. Its sales grew 22% last year to about $370 million, and its net loss shrank considerably.
PHUN Stock: What Happens Next?
In a rising market, animal spirits can lift anything. Whether Phunware has profits or even sales means less than its ties to Trump, so buyer beware.
On the date of publication, Dana Blankenhorn did not hold (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.
