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Former President Donald Trump’s Truth Social began trading Tuesday under the ticker “DJT,” putting the real estate mogul and his initials back at the helm of a publicly traded company.
Trump Media & Technology Group shares soared in early morning trading on the Nasdaq exchange, rising more than $25, or about 50%, to $75.21 per share. Trump owns 58% of the newly public company, which currently holds a stake worth $5.4 billion. — at least on paper.
Trump Media & Technology Group, whose main asset is the social media service Truth Social, has attracted the attention of both critics and supporters, some of the latter expressing support for the former president. I am buying the company’s stock for this purpose. According to regulatory filings, Truth Social posted just $3.3 million in revenue in the first nine months of 2023, putting it in the red.
“DJT has all the makings of a meme stock given the President Trump news factor,” Ben Emmons, senior portfolio manager and head of fixed income at NewEdge Wealth LLC, said in a research note Tuesday. said. “For global macro investors, DJT will be a proxy for how the market will price Trump 2.0 policies.”
Trump Media & Technology Group announced in a statement Monday that the ticker symbol will go into effect on Tuesday following its merger with Trump Media & Technology Group. So-called blank check company, also known as a special acquisition acquisition company (SPAC). A SPAC is a shell company created to take a privately held business public without going through an initial public offering.
In the case of President Trump’s media business, shareholders in a SPAC called Digital World Acquisition Corporation I voted on Friday He voted in favor of the merger and ushered in the next step of taking the new company, Truth Social, public without an IPO. The combined company will officially change its name to Trump Media & Technology Group after the transaction closes on Monday, the statement said.
Christy Marvin, CEO of SPACInsider.com, a service that provides news and data about the SPAC industry, said the namesake symbol is “on-brand” for Trump.
Digital World Acquisition Corporation stock soared $13.01, or 35%, to $49.95 on Monday, ahead of the debut of the new DJT ticker.
Trump: Are you planning to sell your DJT stock?
Trump Media & Technology Group’s multibillion-dollar valuation provides Trump with access to liquidity as he faces financial pressure from a series of lawsuits. He got a big break Monday when the Court of Appeals handed down a reduced sentence. $464 million civil fraud judgment to $175 million; But he still faces mounting legal claims related to other cases.
Mr. Trump could sell some of his DJT stock to pay for his legal fees, but the company currently has a “lockup” period that effectively prohibits executives from selling stock for six months. ing.
However, the company’s board of directors was made up of Trump associates, including Kash Patel, a senior Trump administration official. Experts said his son, Donald Trump Jr., could have the lock-up period waived or shortened.
But Emmons said there are risks if Trump sells his stocks. He owns a significant portion of the company, so selling his shares could destabilize the deal. For example, “If he goes first, [with selling]Based on option prices, this could depress DJT by at least 15% to 40%,” Emmons calculated.
Society of Truth: Lose Money
While it’s true that many tech companies go public at a loss, investors generally hope that by appealing to a wide range of advertisers, companies can expand their user base and quickly grow revenue. ing.
Although Truth Social does not disclose user numbers, it had about 5 million active members in February, according to estimates from research firm SimilarWeb.
In comparison, Reddit Published last weekreported last month, ahead of its IPO filing, that it had about 73.1 million daily active users last year and that its 2023 revenue would increase 21% to $804 million.
Previous DJT Ticker: From IPO to Penny Stocks
It’s also not the first time President Trump has overseen a publicly traded company with the ticker DJT.
The previous iteration of the DJT ticker took place in 1995, when Trump took Trump Hotels & Casino Resorts public in an IPO. The idea was to raise money on the public market to support President Trump’s casino expansion, according to a New York Times article about the IPO.
The stock initially performed well, quickly rising from its IPO price of $14 to a high of $35 per share. But the stock price plummeted over the next few years, eventually trading for pennies, according to the Washington Post.
Trump Hotel & Casino Resort filed for Chapter 11 bankruptcy protection in 2004.
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