Trump Media & Technology Group, led by Donald John Trump, has made its debut on the Nasdaq, trading under the stock ticker DJT. The company’s primary product, Truth Social, was created as a response to Trump’s ban from mainstream social media platforms following the January 6, 2021, attack on the US Capitol. However, the success and profitability of Truth Social remain uncertain, raising questions about the company’s financial future.
The choice of the stock ticker DJT mirrors Trump’s previous publicly traded company, Trump Hotels and Casino Resorts, which faced financial struggles and ultimately filed for bankruptcy in 2004. Despite the company’s losses and setbacks, Trump himself profited significantly through salary, bonuses, consulting contracts, licensing deals, and other unconventional methods. After the bankruptcy, Trump continued to earn millions from the rebranded Trump Entertainment Resorts, which also faced financial difficulties and filed for bankruptcy for a second time in 2009.
Following its recent merger with Digital World Acquisition Corp, Trump Media’s stock, DWAC, has experienced a surge in market enthusiasm, with shares increasing significantly over the past six months. However, analysts warn that the stock may be overvalued based on the company’s low revenue of $3.4 million in the first nine months of the previous year. Yale law professor Jonathan Macey cautions investors against the inflated stock price, citing the potential risks of holding the stock long-term.
Apart from financial concerns, Truth Social has been losing users at a faster rate than X (formerly known as Twitter), casting doubt on its long-term viability. Despite these challenges, Trump’s stake in Trump Media is estimated to be worth approximately $4 billion, posing potential conflicts regarding the lock-up period restrictions on selling stock after the company goes public. With Trump’s civil fraud bond obligation significantly reduced, there may be opportunities for Trump to sell a portion of his stake to cover any remaining payments.
Overall, the launch of Trump Media & Technology Group and the subsequent trading of its stock on the Nasdaq signals a new chapter in Trump’s business ventures. While there is initial market optimism surrounding the merger and stock performance, concerns about the company’s financial sustainability and Truth Social’s declining user base raise questions about its long-term success. Investors and industry experts are closely monitoring the developments of Trump Media to assess its potential impact on the market and Trump’s financial interests.
