In a whirlwind of market excitement, shares of Trump Media & Technology Group, the parent company of former President Donald Trump’s social media venture Truth Social, experienced a meteoric rise on their first day of Nasdaq trading. The fervor surrounding the public debut was palpable, with the stock closing at a robust $57.99, marking a notable 16% increase from its opening and bestowing the company a staggering market valuation of $7.85 billion.
This surge is significant not just for the market spectators but for Trump himself, who is reported to hold nearly 60% of the merged entity, translating to an estimated $4.6 billion worth of shares based on the closing price. However, it is crucial to note that, due to standard lock-up periods, the former president may not be able to immediately liquidate these holdings.
Trump Media’s ascent comes after Digital World Acquisition Corp’s shareholders greenlighted a merger with Trump Media, allowing Trump’s operation to take Digital World’s slot on the stock market under the ticker symbol “DJT.” The shares began trading with such fervor that Nasdaq briefly paused their trading shortly after the session commenced due to the intensity of the activity.
The investor profile for Trump Media appears to be largely dominated by smaller investors, many of whom seem to be motivated by support for Trump or seeking to capitalize on the hype rather than by the careful deliberations typical of institutional investors. Nonetheless, this hasn’t deterred the bullish outlook, even though the company has been upfront about its expectation of continued losses in the near future and the myriad risks associated with Trump’s dominant shareholding, which could potentially prioritize personal interests over those of the collective shareholder base.
On the social media front, Truth Social users took to the platform with hashtags like #DJT to express their support and share their investment stories, with some urging conservative followers to drive the stock price beyond $100 to “drive the liberals insane!”
Despite the immediate financial euphoria, the sustainability of this enterprise remains in question. Trump Media has incurred significant losses, including $49 million in the first three quarters of 2023 and a hefty fine for Trump personally due to allegations of financial fraud. The company has also been forthcoming about the SEC’s scrutiny and the heightened risk of operational losses for the foreseeable future. Meanwhile, Truth Social’s user base, while gaining traction within its niche, still falls drastically short of the numbers boasted by social media giants like Facebook and TikTok.
Relevant articles:
– Trump set to cash in as shares in his media platform Truth Social soar
– “Trump Media” shares soar on Nasdaq trading, Williamsport Sun-Gazette, Tue, 26 Mar 2024 19:33:55 GMT
– Markets News, March 26, 2024: Trump Media Jumps on First Trading Day; Indexes Slip, Investopedia, Tue, 26 Mar 2024 20:17:16 GMT