Trump Media & Technology Group’s stock jumped Friday after Donald Trump scored what political pundits nearly unanimously agreed was a victory over President Biden in the candidates’ first debate of the 2024 election season.
Shares of TMTG, which operates the unprofitable niche social media network Truth Social, were up more than 13% in premarket trading Friday, to over $41/share. That came after the volatile stock closed down 6.4% in regular trading Thursday.
The uptick in TMTG’s stock price reflects investor enthusiasm for Trump’s appearance in the June 27 debate with Biden on CNN. Trump uttered numerous untruths — which were largely left unchallenged by CNN moderators Jake Tapper and Dana Bash — but he won the night relative to Biden’s halting and muted delivery. “Trump left Biden in the dust. Relative to his previous debate performances, Trump even came off as (God help us) presidential,” Variety‘s Owen Gleiberman opined.
The increase in the stock price of TMTG makes Trump’s stake in the company currently worth over $4.7 billion. He owns 64.9% of its shares although he is restricted from selling them until late September due to a post-merger lock-up requirement.
The current $6 billion-plus market valuation of TMTG is abnormal, given the company’s miniscule revenue and significant losses to date. The company reported $770,500 in revenue for the first quarter of 2024 — and a staggering net loss of $327.6 million. Most of the Q1 loss stemmed from costs associated with TMTG’s merger with special purpose acquisition company Digital World Acquisition Corp. to become a publicly traded company. Truth Social, Trump’s preferred social platform, calls itself a “safe harbor for free expression amid increasingly harsh censorship by Big Tech corporations.”
Market watchers have noted that the performance of TMTG’s stock is not based on the company’s financial fundamentals, trading instead on the Trump name. The stock has attracted more than 600,000 retail investors who are evidently motivated by their support for the former president.
The valuation of TMTG is “absurdly out of the realm of normal business,” LinkedIn co-founder Reid Hoffman told CNN this week. “Trump Media is probably more appropriately valued close to $40 million rather than several billion.” Hoffman, a board member of Microsoft (which bought LinkedIn for $26.2 billion), is a vocal critic of Trump and a Biden donor.
Shares in TMTG began trading on Nasdaq under the ticker symbol “DJT” March 26, 2024, following the company’s merger with DWAC. TMTG’s peak closing price was $66.22/share on March 27; it has fallen as low as $22.55/share.
Source Agencies
