The Trump Organization’s Boeing 757, used by the former president.
Donald Trump’s indictment by a Manhattan grand jury has inflamed the former president and his followers. That’s good news for the stocks of media companies serving his audience, to judge from Friday’s market action.
Shares of
Digital World Acquisition
(ticker: DWAC) have fallen 75% in a year as the special-purpose acquisition corporation struggles to close its merger with Trump Media & Technology Group. But as Donald Trump appealed to his fans after Thursday’s indictment over hush-money payments, shares of the SPAC jumped as much as 11% in Friday morning trading.
Broader market measures such as the
S&P 500
were up 1% Friday. The nation’s first criminal charges against a former president —alleging he paid hush money to a porn star on the eve of his 2016 election—evidently didn’t disturb traders.
Attorneys for Trump said Friday that he committed no crime and vowed to fight the charges after his expected appearance in Manhattan criminal court on Tuesday. On the Truth Social platform run by Trump Media, the former president called the indictment “political persecution and election interference at the highest level in history.”
Rumble
(RUM), another social media platform targeting a conservative audience, saw its stock rise by a similar 11% Friday, although shares of the Sarasota, Fla.-based company no doubt benefited because it reported strong revenue growth in the December quarter late on Thursday.
By midday, the two social media stocks had settled to gains of about 6.5% each, with Digital World at $13.90 and Rumble at $9.90.
A prosecution of Trump will also be fodder for broadcasts at Fox News. Shares of the conservative news outlet’s parent company,
Fox
Corp
(FOXA)., were up 0.7% Friday, in line with the market. Citing early data from Nielsen Media Research, a network spokesman said ,”During breaking news coverage of former President Donald Trump’s indictment, FOX News Channel was the most-watched cable news network.”
Fox Corp. shares common ownership with News Corp (NWSA), the parent of Dow Jones, which publishes Barron’s .
Both Rumble and Truth Social hope to peel users away from Twitter, the social media platform where Donald Trump built his online following. The upstart platforms appealed to conservatives when Twitter banned Trump for a time from its platform. The former president has been welcomed back to Twitter since its $44 billion acquisition by
Tesla
CEO Elon Musk in October.
The merger between the Digital World SPAC and Trump Media has been repeatedly postponed, as the SPAC has sought approval from its shareholders and the Securities and Exchange Commission has sought revisions to the merger proxy filing’s disclosures. Neither company responded to queries from Barron’s on the effect of a Trump prosecution on their outlooks.
Rumble shares have been on the rise for months, as the company has reported gains in audience size and revenue. The midterm elections in November boosted user engagement. After a hiatus by its flagship content creator Steven Crowder, the conservative comedian has returned to the platform. The company is also striking deals with promoters of sports such as mixed martial arts and skateboarding.
Rumble didn’t respond to a query from Barron’s.
Thursday, Rumble reported a 580% jump in December quarter revenue, to $20 million, saying the average number of users per month jumped 140%. The company had quarterly cash losses of $17 million.
A note by Oppenheimer analyst Jason Helfstein said Rumble management was performing well, but that the company’s $3.6 billion valuation kept him from upgrading the stock. He rates it at Market Perform.
Corrections & Amplifications: Fox Corp. shares common ownership with
News Corp
,
the parent of Dow Jones. An earlier version of this article incorrectly said News Corp owns both Fox Corp. and Dow Jones.
Write to Bill Alpert at [email protected]
This content was originally published here.
