(Bloomberg) -- Legions of followers betting on conservative social-media platforms have helped stocks like Rumble Inc. and the blank-check firm taking Donald Trump’s media company public to outperform peers, a sign that speculative fervor in the market is still high.

The pair are, respectively, one of the best performers this year among firms that merged with a special-purpose acquisition company and the top-gaining SPAC since listing that hasn’t yet completed a combination. That outperformance -- at a time when shares of established social-media companies mostly are in free fall -- has been fueled in part by retail traders. 

Rumble, the video-sharing platform that says it’s “designed to be immune to cancel culture,” has yet to report earnings as a public company. Digital World Acquisition Corp. is a pile of cash that’s still months from clearing hurdles to complete its merger with Trump Media & Technology Group, if it ever does.

“Both of these have sort of generated meme-stock status,” said Julian Klymochko, CEO and chief investment officer at Accelerate Financial Technologies. “It’s not reflective of fundamental business value, but more so an underlying movement just given what these platforms represent.”

That loyal following has lifted Rumble shares by 26% from its IPO price, while Digital World stock is trading 75% above the roughly $10.30 investors would get if its deal with Trump Media collapses. 

At the same time, the broader bubble in SPAC stocks has burst, wiping out billions and forcing experienced blank-check sponsors to admit defeat and return the cash they raised to investors. The collapse is part of a broader selloff in the more speculative areas of the market, triggered by the Federal Reserve’s interest rate increases to try to curb inflation. 

Rumble generated just $9.5 million in revenue last year. Some Digital World investors have pulled the plug on their commitments for key financing as concerns about the deal mount. The SPAC’s shareholders are scheduled to vote Monday on an extension to the deadline for the firm to complete a deal. Sponsors paid for a three-month extension in September after failing to get enough votes to push back the deadline.

Representatives of Rumble and Digital World didn’t reply to emails seeking comment on their stocks’ performances.

Social media and streaming stocks broadly have been hit over the past year. Snap Inc., Netflix Inc., and Meta Platforms Inc. have each slumped more than 55% as investors shun technology stocks with the Fed hiking rates. 

Digital World and Rumble regularly feature on the list of the most-mentioned companies on message board Stocktwits, like retail trader favorites GameStop Corp. and AMC Entertainment Holdings Inc.

“It reminds me of GameStop and AMC, where those securities aren’t driven by fundamentals either,” Klymochko said. 


Tech Chart of the Day

Apple Inc.’s years of outperforming the S&P 500 means that its market value is now larger than the 181 smallest index members combined, which represent more than a third of the overall number of stocks in the benchmark. The index’s members are weighted according to their equity capitalization, so Apple now accounts for almost 7% of the S&P 500. The top 5 companies -- Apple, Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Tesla Inc. -- have a 22% weighting. 

Top Tech Stories

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    • SpaceX’s out-of-pocket costs for providing Ukraine with Starlink dishes stands at around $80 million so far, Elon Musk said in a tweet late Monday, adding that the company is “obviously” pro-Ukraine as it defends itself against the Russian invasion.
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