Stocks linked to Trump — DWAC and Phunware — sink after ex-president touts social media plans - CNBC

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Former U.S. President Donald Trump attends a rally in Perry, Georgia, U.S. September 25, 2021.

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Two stocks linked to Donald Trump plunged on Tuesday shortly after the ex-president detailed plans for one of the companies, and the other firm said it would sell additional shares to raise capital.

The big pullbacks in the prices of the SPAC Digital World Acquisition Corp., and Phunware — which follows similar drops for both names Monday — came after the companies saw massive gains in their stock values last week.

DWAC's share price skidded nearly 30% Tuesday to close at $59.07 apiece. And tiny advertising software start-up Phunware tanked almost 40% to $4.35.

DWAC, which is a special purpose acquisition company, last week said it would merge with Trump's planned new social media company the Trump Media & Technology Group, with the resultant firm's shares being publicly traded.

That set off a frenzy of buying in DWAC shares over two days last week, which left the stock price more than 800% higher.

Phunware, which is not connected to DWAC's merger, also saw a major gain in share price, likely because of the firm's involvement in Trump's failed 2020 reelection campaign.

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On Tuesday, an hour before trading began, Trump issued a lengthy statement about his plans for the new social media app he intends to roll out and other aspects of his new company.

"To take on Big Tech censorship, we are creating a 'Big Tent' platform: Truth Social," Trump said. "We are inviting people of all political stripes, and all different viewpoints, to come and participate once again in the great American debate. That's what our country is supposed to be about."

"Unlike with the Big Tech platforms, there will be no shadow-banning, throttling, demonetizing, or messing with algorithms for political manipulation," he added. "We will not be treating users like lab rats for social experiments, or labeling alternative views as 'disinformation.'"

Trump also said the new company will launch an on-demand video streaming service "that competes with the increasingly 'woke' and politicized 'entertainment' programming created by Big Tech and Big Media players," and sees "opportunities to create 'cancel-proof' alternatives in other key areas ranging from web services to payment processing."

However, Trump has a long history of overpromising on new businesses and those ventures failing. Among his biggest busts were several casinos in Atlantic City, New Jersey, Trump Airlines, Trump University, a Trump mortgage company and Trump steaks.

Trump's plans for a social media app come months after he was banned by Twitter and Facebook for inciting the deadly Jan. 6 Capitol riot by his supporters.

Also Tuesday, Phunware said it will sell up to 5.6 million additional shares "at the market offering," which would bring its total stock outstanding to nearly 90 million, the company said in a regulatory filing Tuesday.