(Reuters) – Shares of companies tied to former U.S. President Donald Trump gained in premarket trading on Friday, drawing interest from retail investors after the ex-president was indicted in a historic first.
Trump, the frontrunner to be Republican nominee in 2024, was indicted by a Manhattan grand jury after an investigation into hush money paid to porn star Stormy Daniels during the 2016 campaign.
“It might seem counter intuitive … but Donald Trump’s indictment might actually make him more electable with a certain portion of U.S. voters,” Danni Hewson, analyst at AJ Bell, said.
“If more people are talking about Trump, more will gravitate to his social media platform and there’s likely to be a lot more cash swelling the coffers of his campaign budget.”
Shares of Digital World Acquisition Corp, the blank-check company looking to take Trump’s social media venture Truth Social public, rose 12.1%.
Software developer Phunware Inc, which was hired by Trump’s 2020 presidential re-election campaign to build a phone app, gained 5.6%.
“There is always the prospect that if he successfully defends the charges, it may actually boost his appeal and increase his chances of winning the presidency again,” Stuart Cole, head macro economist at Equiti Capital said.
To win the party’s nomination, Trump will likely have to broaden his support beyond the 25%-30% of the Republican electorate generally thought to be in his corner no matter what, especially if the field of Republican candidates narrows in the coming months.
An indictment could also make it difficult for Trump to broaden his appeal and push Republicans tired of the drama around him to look for another presidential candidate.
Shares of video-sharing platform Rumble Inc, popular with conservatives, gained 11.4% after posting a near seven-fold jump in quarterly revenue.
Digital World and Rumble were among the top 10 most touted stocks on investor-focused social media stocktwits.com.
(Reporting by Medha Singh in Bengaluru, additional reporting by Sruthi Shankar; Editing by Saumyadeb Chakrabarty)
