What happened
Shares of the blank check company CF Acquisition Corp. VI (CFVI) fell nearly 11% in the final half hour of trading today for no obvious reason, other than what seems to be volatility related to the company's link to former President Donald Trump.
So what
At the start of this month, CF Acquisition announced its plans to merge with and take public the streaming platform Rumble, which claims to be a "neutral" platform "that is immune to cancel culture."
Image source: Getty Images.
Rumble places fewer limitations on what people can post than do other popular streaming platforms like Alphabet's YouTube and is popular among conservatives. Trump also joined Rumble earlier this year.
Last week, shares of CF Acquisition briefly spiked after the company said it will have a distribution partnership with Truth Social, a social media platform linked to Trump. Truth Social is part of Trump Media & Technology Group, which also plans to go public through the blank check company Digital World Acquisition Corp. (DWAC). Shares of Digital World are up about 450% since announcing the deal with Trump Media. Shares of CF and Digital World appear to be trading with some correlation over the past week.
Now what
Blank check companies linked to Trump seem pretty volatile right now. Shares of Digital World were up roughly 840% but have since come down quite a bit, although they're still up big. Recently, the company announced that federal regulators are investigating Digital World over how it communicated with Trump Media prior to announcing the deal.
Rumble does seem to have some real momentum, with 36 million active monthly users. It trades at a $462 million market cap, and CF Acquisition is valuing Rumble at a $2.1 billion enterprise value. So there may indeed be some potential upside, but any big swings linked to Trump will likely come with volatility as well, so invest with caution and keep an eye on the valuation.
