Phunware (NASDAQ:PHUN) stock apparently soared in October due to its connections to cryptocurrencies and the 2020 reelection campaign of President Donald Trump. Phunware’s software allows companies “to engage, manage, and monetize their mobile applications.”

Because of Phunware’s links with the Trump campaign, some investors believed that the company would be utilized by Trump’s upcoming social media platform, TRUTH Social, which is owned by the Trump Media & Technology Group (TMTG). The latter company has agreed to merge with Digital World Acquisition Corp. (NASDAQ:DWAC), a SPAC.

But the crypto market’s recent slide is likely to continue for some time. And Phunware does not appear to have any significant links to TMTG. Moreover, for those seeking second-derivative exposure to TMTG, there’s a SPAC which is a much better alternative than PHUN stock.

I’ll provide details about the company that’s merging with the SPAC and name the SPAC itself below. But let’s first look at why I think PHUN stock is such a bad investment.

Phunware’s Cryptocurrency Connections

Another InvestorPlace contributor, Dana Blankenhorn, recently explained that PHUN stock got a big boost from Phunware’s Bitcoin (CCC:BTC-USD) holdings.

On Nov. 22, the company reported that as of that day, “Phunware [held] an aggregate of approximately 529 bitcoin, which were acquired at an aggregate purchase price of approximately $31.8 million and an average purchase price of approximately $60,191 per bitcoin, inclusive of fees and expenses.”

But Bitcoin had, as of the morning of Dec. 20, fallen to slightly above $46,000 per coin. As a result, the value of the Bitcoins that the company held as of Nov. 22 (assuming it has not bought or sold any coins since then) had dropped to roughly $24 million on Dec. 20. That’s not much at all, especially when compared to the market capitalization of PHUN stock as of Dec. 20, which was about $285 million.

I continue to believe that cryptocurrencies are a bubble. That’s because their value has not been built on usage (they are not used a great deal) or on their ability to hedge against inflation (they have dropped in recent months even as inflation has surged).

Rather, crypto’s value has jumped primarily because of recent stimulus spending. More people have excess funds with which to speculate and many believed that their cryptos would continue to appreciate, despite their lack of utility or real value.

Those are the classic attributes of a bubble.

Given these points, I believe that Bitcoin is likely to continue to drop going forward. Consequently, Phunware’s small BTC-USD holdings do not at all justify the current, elevated valuation of PHUN stock.

A Tenuous Connection With Trump and a Better Alternative

InvestorPlace Financial News Writer Samuel O’Brien recently reported that, Phunware’s “…ties to Trump stem from the fact that it provided software for his 2020 campaign.”

The company’s link to the 2020 campaign does not, however, mean that TRUTH Social, Trump’s upcoming social network, will generate a significant amount of revenue for Phunware.

Those seeking to invest in a company that’s closely connected to Truth Social have a very promising, alternative stock to buy. That’s the blank-check company or SPAC, CF Acquisition Corp. (NASDAQ:CFVI), which has agreed to merge with Rumble.

Rumble has signed a contract with Trump’s TMTG. Under the terms of the deal, Rumble is going to “deliver video and streaming for TRUTH Social.” And according to TMTG, the companies are also reportedly “in exclusive negotiations for Rumble to provide infrastructure and video delivery services for TMTG’s Subscription Video On-Demand product, TMTG+.” As TMTG’s revenues surge, the deal could be very lucrative for Rumble.

Moreover, I’ve seen multiple conservative pundits post videos on Rumble, which has committed to following free-speech principles. Therefore, I believe that the company is well-positioned to become a pro-free-speech alternative to Alphabet’s (NASDAQ:GOOG,NASDAQ:GOOGL) YouTube. As a result, Rumble is poised to become very popular with conservatives.

The Bottom Line on PHUN Stock

PHUN stock is extremely overvalued and should be sold, since Phunware is unlikely to generate significant sales from either Bitcoin or TMTG.

Those seeking to profit from TMTG’s likely success should buy DWAC stock and/or CFVI stock. I recommend buying relatively small amounts of both names, and I have done so myself.

On the date of publication, Larry Ramer held long positions in DWAC and CFVI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015.  Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.