Former President Donald Trump’s two-year-old social media platform Truth Social made its stock market debut Tuesday, and share values rose quickly to over 50% at one point on volumes that led NASDAQ exchange officials to briefly halt trading of the shares.
Stock for Truth Social’s parent company, Trump Media & Technology Group, entered public trading via a merger with so-called blank check company, Digital World Acquisition Corp., in a deal that was approved Monday. Digital World shares gained 35% Monday ahead of the debut of the newly minted stock, trading under the ticker designation “DJT,” Trump’s initials, in a much anticipated launch.
While prices surged during the day and peaked around $78 per share, DJT was selling for about $58 per share at the end of regular trading on Tuesday, up around 16% for the day.
Trump controls about 60% of Trump Media & Technology Group and his stake in the company was worth about $5 billion Tuesday afternoon, but will fluctuate with stock value changes. As Trump faces a $454 million fraud penalty, a ruling he’s appealing, his stock holdings in the eponymous media and technology company are locked up for six months. His holdings won’t come into play for that period to address legal issues or help fund his campaign for a second term in the White House unless a special dispensation is approved by the company’s board.
Truth Social has struggled to be profitable since its launch in early 2022 and brought in $3.4 million in revenues in the first nine months of last year against $49 million in losses, according to an SEC filing by Digital World Acquisition. The platform, which is estimated to have about 5 million monthly active users, is also dwarfed by its mainstream competitors, including TikTok with 2 billion monthly active users and Facebook with 3 billion. Truth Social looks and functions much like X, formerly Twitter, and the Elon Musk-owned platform reports it has around 600 million monthly active users.
Will Truth Social stock hold value?
While Truth Social could rise to new prominence if Trump regains the presidency this fall, and he chooses to use the platform as his primary social media outlet, skeptics say the current fervor over investing in Truth Social isn’t supported by solid business fundamentals.
“I think there is a possibility of, sooner or later, the stock price falling by 95%,” Jay Ritter, a professor at the University of Florida’s Warrington College of Business and an expert on initial public stock offerings, told The Associated Press.
Brian Dunn, director of the Institute for Compensation Studies at Cornell University, compared the fervor for Trump Media shares to the meme stock craze that boosted shares of companies such as GameStop and AMC Entertainment to exorbitant heights in 2021, according to AP.
“Like any meme stock or fad, as long as there’s a greater fool to buy you out for what you paid for it, then you can continue to prosper,” Dunn told AP, warning that small investors “could end up holding the bag when the music stops.”
But supporters of the former president shared their excitement and tips about how to buy the stock on Truth Social on Tuesday as one user urged conservatives to “get behind the DJT stock and sent it over $100 per share” to “drive the liberals insane!” Another declared: “Get yourself a piece of #DJT stock if your a true MAGA supporter,” per a report from The Associated Press.
On Monday, Trump Media CEO Devin Nunes, a former House Republican, said, “As a public company, we will passionately pursue our vision to build a movement to reclaim the Internet from Big Tech censors.”