History indicates that the combination of Republican presidential nominee Donald Trump and the stock market is not a favorable one.
Nevertheless, despite this, some of his most ardent supporters are enthusiastically investing in his latest venture.
Individual investors have been aggressively purchasing shares of a shell company, Digital World Acquisition Corp., which is set to vote on taking Trump's social media platform, Truth Social, public.
The shares of the acquiring company have surged by 140% this year.
However, according to comments from nearly 8,000 Truth Social users, this surge is not based on expectations of long-term business success.
One user, known as fantasticblush, said, "I bought several times last Monday & Tuesday, little by little to show support of the stock.
" Another user, ajdelval, expressed confidence, stating, "This is a Truth Movement and no matter what happens tomorrow this merger will happen tomorrow or in the future.
We will win this war no matter what."
This situation resembles the 2021 meme stock craze, where investors drove up the prices of companies like GameStop and Bed Bath & Beyond, despite their poor growth prospects.
However, this time, the implications go beyond the stock market. If the vote is successful, Trump stands to gain approximately $3.5 billion, which could help alleviate financial pressure resulting from a $454 million judgment against him in a civil-fraud case.
The parent company of Truth Social is going public through a merger with a special-purpose acquisition company (SPAC), with a shareholder vote scheduled for Friday.
If approved, Trump's company could replace the shell company as early as Monday, with the new ticker symbol being DJT, a nod to Trump's initials.
Despite the stock's current performance, Truth Social faces significant challenges in the market.
The company reported approximately $3.4 million in revenue in the first nine months of 2023 and a net loss of about $49 million over the same period.
It competes against well-established rivals like Meta Platforms' Facebook and Elon Musk's X.
Experts caution that the surge in DWAC shares is not based on fundamentals.
Kristi Marvin, CEO of SPACInsider.com, stated, "Institutions are not trading this."
This is not the first time DWAC shares have seen a surge.
They reached as high as $97.54 in March 2022, only to drop by 87% over the next 15 months during a broader stock-market decline.
User PrattyDaddy expressed optimism, saying, "What a message it would be if we closed at $45.47 today," possibly referring to Trump potentially becoming the 47th U.S. president.
This wouldn't be the first time a Trump-branded stock has been on the market.
Trump Hotels & Casino Resorts, a publicly listed company, filed for chapter 11 bankruptcy protection in 2004.
Despite the rocky history of Trump-branded stocks, enthusiasm among supporters remains high.