Stocks in conservative media are boosted by Trump's indictment

The indictment of Donald Trump by a Manhattan grand jury has inflamed the former president and his followers even further. The stock market action on Friday was a good sign that media companies serving their audience will benefit from this news.

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As Digital World Acquisition DWAC +8.15% (Ticker: DWAC) has struggled to close its merger with Trump Media & Technology Group, its shares have fallen 75% in a year as the special-purpose acquisition company struggles to close the deal. Despite the fact that Donald Trump appealed to his fans following Thursday's indictment regarding hush-money payments, shares of the SPAC increased by as much as 11% on Friday morning after the news broke.

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The S&P 500 SPX +1.34% and other broad market measures such as the DJIA were up 1% Friday. It appears that the nation's first criminal charges against a former president - alleging he paid hush money to a porn star on the eve of his 2016 election - did not disturb the traders' confidence in their market.

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The attorneys for President Trump said on Friday that they do not believe the president committed any crime and have vowed to fight the charges once he appears in Manhattan criminal court on Tuesday. The former president described the indictment as an example of "political persecution and election interference at the highest level in history" on the Truth Social platform run by Trump Media.

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While shares of the Sarasota, Florida-based company Rumble RUM +3.91% (RUM), another social media platform geared toward a conservative audience, saw their stock rise by a comparable 11% on Friday, there is no doubt that this was due to the company's late-Thursday announcement of strong revenue growth for the December quarter.

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At the close of trading on Tuesday, both stocks had risen by approximately 6.5%, with Digital World trading at $14.90 and Rumble trading at $9.90, respectively.

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The possibility of Trump being prosecuted will also be fodder for Fox News to air in future broadcasts. In line with the market, Fox Corp (FOXA), which owns the conservative news outlet's parent company, was up 0.7% on Friday, matching the rise in the overall market. In a statement released by the network on Friday, a spokesman stated that FOX News Channel had been the number one cable news network during breaking news coverage of former President Donald Trump's indictment, based on Nielsen Media Research data.

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Dow Jones and Fox Corp. share a common parent company: News Corp NWSA +1.83%  (NWSA).

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Trump has built a significant following online thanks to Twitter, which is one of the most popular social media platforms and where Rumble and Truth Social hope to pull users away from it. When Twitter banned Trump from its platform for some time, the upstart platform gained popularity among conservatives. After Twitter was acquired by Tesla CEO Elon Musk in October for $44 billion, the former president has been welcomed back to the platform with open arms.

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As the SPAC has sought approval from its shareholders for the merger, the Securities and Exchange Commission has of late been seeking revisions to the merger proxy filing of Trump Media, as well as revisions to the disclosures of the merger, the merger between Digital World SPAC and Trump Media has been repeatedly postponed. Trade Algo asked both companies whether a Trump prosecution would affect their outlook on the stock market and neither company responded.

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Since the company announced increases in audience size and income, Rumble shares have been rising steadily for several months. User participation was bolstered by the midterm elections in November. Steven Crowder, its star developer of original content, took a break from the platform, but he has now made a comeback. Deals are being made by the corporation with organizations that support various sports, including skateboarding and mixed martial arts.

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A Trade Algo's query went unanswered by Rumble.

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Thursday, Rumble reported that it had increased its revenue by 580% during the December quarter, up to $20 million and that the average number of users per month had increased by 140%. It is estimated that the company suffered a cash loss of $17 million in the quarter.

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Rumble management was performing well, according to a note by Oppenheimer analyst Jason Helfstein, but he decided not to upgrade the stock because of its valuation of $3.6 billion. The rating he gives it is Market Perform.