Some big investing news has triggered some volatility among social media stocks & Trump stocks in the stock market today. Tesla (NASDAQ: TSLA) disclosed a 9.2% stake in social media company Twitter (NYSE: TWTR) in a new 13G filing. According to the filing, Musk now holds 73,486,938 shares in TWTR stock. As you might’ve guessed, shares of Twitter exploded to new 2022 highs during premarket trading on Monday. In fact, after reaching a high of $51.20 during the early session, TWTR stock reached a level it hadn’t seen since last November. The biggest question now is, what comes next?
In the short term, some penny stocks and Trump stocks are on the radar, but not in the same way TWTR has captured attention. The alternative social media company, Truth Social, and its proposed public “home,” Digital World Acquisition Corp. (NASDAQ: DWAC), saw shares slide to some of their lowest levels all year. DWAC stock grew in popularity late last year after Truth Social was tied to former President Donald Trump.
Similar to the meme stock trend, DWAC brought an entirely new niche to the market: Trump stocks. In many cases, these Trump stocks had ties to certain penny stocks, including Phunware Inc. (NASDAQ: PHUN), SG Blocks (NASDAQ: SGBX), and Salem Media Group (NASDAQ: SALM), to name a few. We’ve also seen the upcoming social platform Rumble and its proposed SPAC partner, CF Acquisition Corp. (NASDAQ: CFVI), trade in lock-step with other Trump-tied stocks.
What’s Happening After Elon Musk Invested In TWTR?
We’ve discussed the idea of “sympathy sentiment” plenty of times on PennyStocks.com. For instance, when certain low float penny stocks, short squeeze penny stocks, or even stocks under $1 trend on FinTwit, the momentum can snowball. In this case, Elon Musk and his recent investment into social media company Twitter have brought a bit of negative sentiment to some alternative social media stocks, including DWAC and CFVI.
In turn, even companies without direct ties to social media but ones tied to previous trends mentioned have tumbled lower after the Musk Twitter news. Phunware shares slipped to $2.51 while other names like Creatd (NASDAQ: CRTD) also traded lower.
Social Media Penny Stocks To Watch
As this snowball effect has taken some of these stocks lower, there may be a few more critical questions to answer right now. Is the dip in DWAC stock temporary? Will Twitter shares continue higher after Musk’s 9.2% stake? Also, for those traders looking for opportunities, how will this impact penny stocks? As far as the first few questions, time will tell, but DWAC stock has already shown signs of rebounding before Monday’s opening bell. As for penny stocks? Several tech and social media names appear to have caught some strong sentiment-driven momentum:
DatChat Inc. (NASDAQ: DATS)
Shares of the encrypted messaging app and social platform company, DatChat (NASDAQ: DATS) continued their uptrend on Monday. DATS stock has been climbing steadily since mid-March, with its recent metaverse-related news sparking optimism among retail traders. DatChat announced the launch of its metaverse advertising and NFT monetization platform, VenVūū, last week.
According to the company, “The VenVūū Dynamic Content NFT enables metaverse parcel owners to link their parcels with the VenVūū protocol in a simple and easy manner. Parcel owners opt into campaigns that are being offered by advertisers, and advertisers can offer campaigns to landowners based on targeting criteria.”
iQIYI Inc. (NASDAQ: IQ)
Chinese online entertainment service company iQIYI (NASDAQ: IQ) has also caught some momentum during early morning trading on Monday. IQ stock jumped to highs of over $5.40, continuing its latest multi-week uptrend. At the start of the month, the company announced an upgraded collaboration model for online film distribution. The new model includes premium and subscription-based offerings. iQIYI expects streamers will create transaction platforms accessible to content creators.
DouYu International Holdings (NASDAQ: DOYU)
Livestreaming of video games and esports is becoming a major industry, and DouYu (NASDAQ: DOYU) is looking to capitalize on that. The company offers a game-centric live streaming platform in China, and recent revenues have shown how much growth has come within the last year. DOYU shares have been trading higher following DouYu’s latest updated financials for Q4 and full-year 2021. Net revenues for the fourth quarter jumped to $365.3 million while gross profit increased by over 30%.
“Going forward, we will leverage our innovative interactive operations, as well as rich content across various formats, including livestreaming, videos, graphics, and communities, to continue exploring new growth initiatives as we build on our leading position in the gaming livestreaming industry,” explained CEO Shaojie Chen in a March PR.
Penny Stocks To Watch Next
As new trends emerge, traders will find ways to use them to make money. Regarding penny stocks, one of the main things to remember is that risk goes hand-in-hand with reward. Volatility also plays a leading role, and things can shift quickly. With today’s example, even news that isn’t directly related to specific companies can impact their performance in the stock market. So understanding how some companies are tied into the same niche can help when it comes to taking advantage of breaking news like Elon Musk buying Twitter stock.