Shares in Donald Trump’s social media business soared on their stock market debut in New York yesterday – valuing the former US president’s stake at nearly £5billion.
Trump Media & Technology Group, which is behind his Truth Social platform, rose almost 60 per cent to $79 on the Nasdaq in early trading.
That gave the company a value of over £7billion – making Trump’s 58 per cent stake worth £4.9billion.
The stock – which trades under the ‘ticker’ DJT in a nod to Trump’s initials – later closed up 16 per cent at $57.99.
The rally will come as a welcome boost for Trump, 77, as he faces huge legal bills while at the same time running for president again.
Flying start: Trump Media & Technology Group, which is behind the Truth Social platform, rose almost 60% to $79 on the Nasdaq in early trading
However, lock-up restrictions could prevent him from selling or borrowing against his shareholding for six months.
That means Trump is still far away from a windfall, which will be tied to how well the shares do over the next few months.
And analysts have warned that shares in Trump Media may already be overvalued given it has yet to make a profit.
‘The valuation of the business is rich relative to its underlying fundamentals,’ said Thomas Hayes, chairman of Great Hill Capital.
‘This valuation may be more of a proxy on the enthusiasm of supporters for Trump than a reasonable estimate of underlying business prospects.’
Trump Media’s Nasdaq debut came after it completed its merger with Digital World Acquisition, a so-called ‘spac’ or stock market-listed shell company.
Truth Social has 8.9m account holders but just 5m active users compared with 550m on X, which used to be called Twitter.
Trump’s firm brought in just £2.6million in revenue in the first nine months of last year and lost nearly £40million as it continues to burn through cash.
AJ Bell investment analyst Dan Coatsworth said the surge in the share price was ‘completely out of kilter’ with the current business.
Trump first launched Truth Social in February 2022 as a rival social network to what he called the ‘liberal media consortium’.
He said the social media app, which has a similar feed to X, would be a ‘fight back against the Big Tech companies of Silicon Valley’.
But its creation came as Trump reeled from his ban from X, Facebook and Instagram following the January 6 Capitol Hill riot.
During his time in the White House, Trump used social media to reveal policy decisions, fire aides and argue with critics, and considered it a vital means of communication with his 88m followers, many of them supporters.
In a statement this week, Trump Media chief executive 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.’
The company also plans to launch its own streaming service, which would be a ‘non-woke’ alternative to the likes of giant Netflix.
But its future is very much dependent on the whims of Trump. The company, which is based in Florida, said in a regulatory filing that it ‘is highly dependent on the popularity and presence of President Trump’.
It added that if the media personality were to limit or discontinue his relationship with the company, including due to his campaign to regain the presidency, the company ‘would be significantly disadvantaged’.
The company’s board is also loaded with Trump’s closest allies, including his son.
This has led to some experts calling the company a so-called meme stock – comparing it to GameStop and AMC, which skyrocketed during the pandemic thanks to a push from retail traders.
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