New York, NY – Donald Trump’s media company experienced a significant surge in its stock price as it officially entered the stock market. The company’s shares surpassed $70 during early trading, resulting in a market value exceeding $9 billion. Although the day ended with shares at around $58, still up over 16%, the company’s debut injected more than $200 million into Trump Media & Technology Group and provided the former president with a stake valued at more than $4 billion.
Despite the impressive numbers, analysts argue that the company’s performance does not justify its soaring valuation. Trump Media’s Truth Social, a platform akin to Twitter, only generated $3.3 million in revenue in the first nine months of the previous year, experiencing nearly $50 million in losses. The platform claims to have attracted 8.9 million accounts since its public launch in 2022 as an alternative to mainstream social media platforms like Facebook, but the active user count remains uncertain.
In comparison, Reddit – another recently listed company – boasts a market value of around $11 billion with over 70 million users and $800 million in revenue in the past year. Market experts liken the trading pattern of Trump Media, denoted by the ticker symbol DJT, to a meme stock, where prices are disconnected from actual business performance. Interest in the company is largely driven by individual investors, many of whom are reportedly Trump supporters.
Trump Media’s journey to the stock market began in 2021 through a SPAC merger with Digital World Acquisition Corp, a shell company designed to acquire and take companies public. Delays due to government investigations and regulatory hurdles were eventually resolved earlier this year, with Digital World shareholders approving the merger last week. Prior to listing on the Nasdaq exchange, Trump Media executives heralded the event as a pivotal moment for the company and the broader media landscape.
The company’s chief executive, Devin Nunes, a former congressman, expressed the company’s commitment to providing a platform for free expression and challenging the dominance of Big Tech in censoring content. Despite the successful debut, Trump, who owns a majority of the company’s shares, faces restrictions on selling his holdings for at least six months, limiting his immediate access to the windfall. Speculation remains on how Trump’s political activities and potential 2024 presidential campaign could impact the company’s stock price. Experts caution that the current share price far exceeds its intrinsic value, posing risks to investors amidst uncertain political developments.