SINGAPORE (May 9): Is President Donald Trump at it again? Talking up stocks with rumours to make a wee bit of money? A day right after a big New York Times exposé on his stock investing MO?
According to CNBC, a tweet by Trump on Wednesday sent shares of US penny stock Workhorse soaring.
In the tweet, Trump said General Motors CEO Mary Barra had informed him that GM would sell its shuttered Lordstown manufacturing plant to Workhorse to build electric trucks.
Shares of Workhorse, the Ohio-based automaker which makes electric vehicles, jumped more than 214% to close at US$2.65 after opening at 82 cents. Workhorse has a market value of just US$173 million ($236 million).
GM later clarified that it is still in talks about a potential sale of the Warren, Ohio-based plant, but stock analysts in the US told CNBC Trump’s tweet was behind the surge.
In fact, Trump’s tweet had crashed the company's website, which was still inaccessible about three hours after the Trump mention, reported CNBC.
Trump's comments also raised speculation that "Workhorse is likely to be a vendor for the US Postal Service programme,” the analysts also told CNBC.
Workhorse confirmed to CNBC it was one of the finalists being considered for the US$5 billion-plus federal contract to replace US Postal Service vehicles but would not comment further.
Interestingly, Workhorse is working on the USPS project with VT Hackney, a subsidiary of ST Engineering.
Shares of the defence and engineering group closed 11 cents higher at $3.99 in Singapore on Thursday.
Trump’s tweet follows a NYT exposé on Tuesday which detailed how the man had made money from the stock market by suggesting he would take over a company on several occasions.
See: Trump chalked up US$1.17b in losses in over a decade and also partly profited from talking up stocks, NYT reports
But Trump would instead sell his shares, gaining millions of dollars in profit from the resulting rise on the stock market.
According to the NYT, Trump used this tactic with the Hilton Hotels, Gillette razor company, and Federated Department Stores although his antics didn't fool investors for long.
In 1989 Trump bought a large stake in American Airlines and once again announced a takeover bid. But this time, the stock price slumped with Trump losing some US$35 million.
