Shares in Donald Trump's social media company saw a significant rise after the president-elect reaffirmed his decision not to sell his stake in the parent company of Truth Social.
He also called for an investigation into potential market manipulation and the actions of short sellers, further fueling investor interest.
About half an hour into Friday's trading, when shares were dipping, Trump posted on Truth Social regarding the company's stock: "There are fake, untrue, and possibly illegal rumors or statements, likely spread by market manipulators or short sellers, suggesting that I intend to sell shares of Truth. THESE RUMORS ARE FALSE. I HAVE NO INTENTION OF SELLING!"
Traders frequently purchase a stock in anticipation of a favorable event for a company, and when that event occurs, they sell to secure their share of the profit. Trump Media's stock price surged nearly 16 percent to reach $32 per share on Friday.
Earlier this year, Trump Media CEO Devin Nunes called on Nasdaq to look into whether short sellers, who were betting against the company without holding or borrowing shares, had influenced the company's stock price.
"I'm very pleased he's the president and believe he'll tackle the short selling issue once he takes office," Todd Schlanger, a shareholder from West Palm Beach, said to ABC News.
The company has frequently been referred to as a "meme stock" because of its dramatic price swings since it went public in March, with its valuation largely detached from traditional business fundamentals. Instead, the stock has often moved in response to speculation and political sentiment rather than company performance.
Over the past year, Trump Media's stock has functioned almost as a measure of Trump's electoral prospects. In one five-week period, the stock's value skyrocketed by four times its original price, only to plunge by 41 percent over three days at the end of last week. Following this steep drop, it saw a rapid rebound the day before the election.
Data from Similarweb, a site that tracks web traffic, shows that Trump Media's platform draws only 3.7 million unique visitors each month, a stark contrast to its competitor X, which sees 461.4 million monthly visitors.
With Trump preparing to assume office and the company's stock price on the rise, his 57 percent ownership in the company is now valued at nearly $4 billion.
A week ago, The New York Times reported that "people inside the Trump camp have been speculating for weeks now that Truth Social will, at some point — perhaps sooner rather than later— be absorbed" by Musk's platform, X.
