What happened

Digital World Acquisition (DWAC) and Phunware (PHUN 4.21%) skyrocketed on Friday, as excitement for former President Donald Trump's new media company continued to build among investors.

By the close of trading, shares of Digital World Acquisition and Phunware were up 107% and 471%, respectively, after rising as much as 285% and 1,471% earlier in the day. 

So what

On Wednesday, Digital World Acquisition announced a deal to merge with Trump Media & Technology Group. The combined company intends to launch a new social network to compete with the likes of Facebook and Twitter. "I created Truth Social and TMTG to stand up to the tyranny of Big Tech," Trump said in a press release.

The news sent Digital World Acquisition's share price into the stratosphere on Thursday, and investors bid up its stock again on Friday.

A person is pointing to an upwardly sloping stock chart.

Image source: Getty Images.

The news also appeared to spark investors' interest in Phunware. The advertising software company reportedly worked with Trump's re-election campaign to develop mobile apps. Traders appear to be betting that Phunware could play a role in the creation of Trump's new social network, though there have been no reports of a partnership between Phunware and Digital World Acquisition. 

Now what 

The speculative mania that's surrounded Trump's latest business deal has generated fortunes for people who bought shares of Digital World Acquisition or Phunware shortly after the merger was announced. However, investors buying today are paying a steep premium to where these stocks were trading just a few days ago -- and thus are taking on significantly more risk.