Shares in Donald Trump’s media venture have experienced a remarkable surge as the company commenced trading on the stock market, with initial shares exceeding $70 each.
This surge elevates the company’s valuation to over $9 billion, significantly boosting Trump Media & Technology Group with a capital infusion exceeding $200 million. This financial uplift positions the former U.S. President with a stake exceeding $5 billion. Despite this financial success, skepticism remains regarding the valuation’s justification due to the company’s modest operational outcomes.
Trump Media is the entity behind Truth Social, a platform similar to Twitter, which reported revenues of merely $3.3 million in the first nine months of the previous year while incurring losses close to $50 million. The platform claims to have garnered 8.9 million accounts since its public launch in 2022 as a mainstream social media alternative, yet active user numbers remain uncertain.
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Currently, Trump, who has been actively seeking funds to settle legal fines, holds a majority share in the company but faces restrictions on selling his stake for at least half a year, hindering immediate access to the newfound wealth.
The company’s governance structure, filled with Trump’s associates including his son, possesses the authority to amend these restrictions, although immediate changes are deemed improbable by market analysts.
The stock market entry of Trump Media was achieved through a merger with Digital World Acquisition Corp, a special purpose acquisition company (SPAC) designed for acquiring and taking a company public. This merger faced delays due to regulatory scrutiny and other challenges but received the green light from regulators and shareholder approval earlier this year.
Notably, the majority of Digital World’s shares are held by individual investors, rather than institutional ones, suggesting a strong base of Trump supporters.
