Photo by Patrick Weissenberger on Unsplash
Trump Social Media Stock Surges in Market Debut
March 26, 2024
Former President Donald Trump’s social media venture made a strong entrance into the stock market on Tuesday. Trump Media & Technology Group, the parent company of Truth Social, saw its shares soar over 50% in the initial moments of trading. This unexpected rapid increase prompted a brief trading halt in the stock market to help manage the increased volatility.
Although the stock cooled slightly post-resumption, investor interest remained high. By midday, it had surged over 50% and ranked among the most actively traded stocks on the Nasdaq exchange.
Trump seemed to celebrate the stock’s performance with a post on his platform during late Tuesday morning. Shareholders of Digital World Acquisition Corp. (DWAC), a shell company, approved a merger with Trump’s social media entity on Friday, facilitating its entry into the public market.
The stock, now trading under the ticker DJT, garners significant attention due to its potential impact on Trump’s finances. His net worth, estimated at over $6 billion on paper, according to Bloomberg, stands to benefit from any positive performance of DJT stock.
Trump faces a deadline of 10 days to post a $175 million bond for a judgment in his New York civil fraud trial. However, his liquidity appears substantial, with Trump claiming to possess at least $500 million in cash.
Despite these financial considerations, questions persist about the company’s financial stability. Financial data from the first nine months of last year revealed that Trump Media incurred losses exceeding $49 million while generating revenue of nearly $3.4 million. In comparison, Twitter, now known as X, reported approximately $2.5 billion in revenue for the same period.
Trump’s ability to profit from DJT stock is limited initially, as he is prohibited from selling his shares for six months post-merger. Nevertheless, this restriction may change subject to the company’s board of directors’ decision to permit stock liquidation.
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