Trump Media Stock Rises by 59% as Truth Social Debuts on Nasdaq

Donald Trump's entry into the Nasdaq stock exchange was marked by a remarkable surge in the value of Trump Media & Technology Group. The company's shares experienced a significant rise, reaching a peak before a late-day selloff somewhat moderated the gains. Despite experiencing a correction, Trump's social media venture, Truth Social, managed to attain a closing market value of close to $8 billion, positioning it alongside well-established companies such as Lyft and Etsy.

This surge in stock price has substantially bolstered Trump's wealth, considering his significant ownership stake of approximately 58% in the company. According to Bloomberg, this stake alone is valued at over $4 billion, contributing to Trump's total net worth, which now stands at around $6.5 billion. Additionally, if the stock price is maintained above $17.50 per share for an extended period, Trump will receive tens of millions of additional shares, according to AP News.

However, it's essential to note that a substantial portion of the business mogul-turned-politician's wealth is tied up in his shares of Truth Social, and he currently cannot liquidate these holdings due to a mandatory six-month lock-up period. Speculation has arisen regarding the possibility of Trump seeking a waiver from the board of Trump Media & Technology Group, comprised of individuals closely associated with him, including his son, Donald Trump Jr., and former Rep. Devin Nunes. This waiver, if granted, could potentially allow Trump to bypass the mandatory six-month lock-up period on his shares in Truth Social, thereby providing him with earlier access to his wealth, which could be the boon he needs amid his myriad legal battles.

However, while there's enthusiasm within certain circles, particularly among supporters of the MAGA movement, stock market analysts offered a more measured perspective. They highlighted that the valuation of Trump Media appears to be out of sync with the actual performance and dynamics of its business operations. Thomas Hayes, the Chairman of Great Hill Capital, said, "The valuation of the business is rich relative to its underlying fundamentals, but I would not get in front of it in the near term. This valuation may be more of a proxy on the enthusiasm of supporters for Trump than a reasonable estimate of underlying business prospects."

Truth Social, the flagship product of Trump Media, operates in a social media landscape overwhelmingly dominated by giants like Meta, the parent company of Facebook. Trump Media has faced substantial financial losses amounting to tens of millions of dollars, coupled with limited sales. "It's hard to come up with any reasonable metrics that would get you to this valuation," Derek Horstmeyer, a finance professor at George Mason University in Virginia, told USA TODAY. Year-to-date gains for the SPAC, now called Trump Media and Technology Group, reached an impressive 354% as of Tuesday, March 26. Interestingly, Trump previously utilized his initials as the ticker symbol for a publicly traded company, notably Trump Hotels and Casino Resorts, in 1995, which later filed for bankruptcy.