Trump's social media company soars nearly 50% in its first day of trading on Nasdaq

[ificandream]

Source: Associated Press

Shares of Donald Trump’s social media company jumped nearly 50% in the first day of trading on the Nasdaq, boosting the value of Trump’s large holdings in the company as well as the smaller stakes of fans who purchased shares as a show of support for the former president.

Trump Media & Technology Group Corp. was acquired Monday by a blank-check company called Digital World Acquisition Corp. Trump Media, which runs the social media platform Truth Social, has now taken Digital World’s place on the Nasdaq stock exchange.

Before trading began, Trump Media had a market value of about $6.8 billion, a figure that will rise significantly if the early gains in the shares hold. The shares are trading under the ticker symbol “DJT.” Trump holds a nearly 60% ownership stake in the company. As of 9:55 a.m. ET, the shares were up 47% to $73.50.

The stock created such a frenzy that Nasdaq briefly halted its trading just two minutes after it began for the day.

Read more: https://apnews.com/article/trump-media-truth-social-nasdaq-stock-106d7c423174ca1d7cc3cc9a3f3897a0

[3Hotdogs]

1. Maybe the universe ain't "just" after all.

So Anal Fistula is now worth $6 Billion.

[Bernardo de La Paz]

13. On paper. Lots of time for it to drop to reflect fundamentals before he can access it 6 months plus down the road. nt

[iluvtennis]

26. Exactly. His shares aren't worth shit right now. n/t

[Bernardo de La Paz]

28. But media sells by sensational headlines, where fact don't matter. . . . nt

[24601]

39. I've read a little more on the lockup agreement and it also prohibits selling options. If that were not the case, Musk,

for example, could pay him $15B for the right to purchase 5,000 shares on October 1st at the March 28th price. It's a shiny object just waiting for someone to use it to circumvent campaign contribution limits.

[iluvtennis]

40. Thanks for that info about the options - good stuff. n/t

[kysrsoze]

2. Classic pump and dump scheme. Watch it plummet once...

Reality of very little current or future income sets in. By then, TSF will have sold all his stock.

[FakeNoose]

33. Yes it's just like those Digital Trading Cards that turned out to be worthless

LOL! Some people are such complete idiots!

[MichMan]

3. Wonder if anyone here bought short on margin like they said they would?

https://www.democraticunderground.com/?com=view_post&forum=1002&pid=18801542

[Bernardo de La Paz]

12. Market watch says 135 M shares outstanding and 3.7 million are shorted

The 135 seems too high because that would indicate a market cap of $9.5 billion but they also say market capitalization is $6.8 billion.

Yahoo Finance (Reuters) has it more in line with my calculation (emphasis added):

At $68.28 per share, the company's market capitalization was $9.25 billion on an undiluted basis. Trading in the shares under the new ticker "DJT" was briefly halted just after the opening bell due to volatility.

Donald Trump's majority stake in TMTG was last valued at $5.38 billion, although lock-up restrictions for six months could prevent him from selling or borrowing against his shareholding.

"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," 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."

[appmanga]

29. By now...

...shorting would cost you a premium.

[yankee87]

4. Money Laundering

I believe, other than the cultists wasting money, is a way to launder money from foreign countries.

[jimfields33]

5. Sadly legal.

[Bernardo de La Paz]

18. Not legal. Deutsche Bank paid about $640 million dollar fine 2017 for its role in stock trades that laundered. . . .nt

[jimfields33]

21. Oh wow. I thought foreigners could buy our stocks.

Guess not. I know some military bought South Korean stock while stationed there. I didn’t, but I guess they have different rules.

[Think. Again.]

6. Hoards of short sellers...

...will pounce in 3,....2,....

[Martin68]

7. I suspect brokers are snatching up shares now to sell to suckers before the price plunges.

[former9thward]

20. Brokers have not been needed to buy stocks since the 1980s.

You can buy stocks with your phone or laptop with a few mouse clicks.

[Martin68]

36. Are you suggesting there are no stock brokers left? If not, why did you assume I'm unaware that stocks can be purchased

on the internet?

[former9thward]

38. Why would brokers "snatch up shares"?

Anyone who wants them can buy them on the internet. That quote is from your post, not mine.

[bluestateboomer]

8. The Stock Market is a Casino.

The rise and fall of stock prices, for even very legitimate corporations, have very little to do with the value a corporation provides to society. In the case of Tr**h Social, trading it's stock is just an opportunity for people to funnel cash into the abyss of TSF's legal fund.

[mahatmakanejeeves]

10. So tell me; what do you think your pension fund is invested in?

Sun Mar 10, 2024: I'm a leading edge Boomer

My wife and I have a comfortable retirement thanks to our unions ...

So tell me; what do you think your pension fund is invested in?

[IbogaProject]

9. Most IPOs like this go up

And then they stall. Then later as shares stop being restricted the price slowly and sometimes quickly, hopefully, comes down.

https://edition.cnn.com/2024/03/25/investing/trump-stock/index.html

[IbogaProject]

11. There is an asymmetry with IPOs

Problem is he will raise some cash from this over the summer and until the election.

https://www.cnbc.com/2019/04/03/dont-be-fooled-by-the-unicorn-hype-this-year-most-ipos-lose-money-for-investors-after-5-years.html

More than 60 percent of more than 7,000 IPOs from 1975 to 2011 had negative absolute returns after five years in the secondary market, according to a UBS analysis using data from University of Florida professor Jay Ritter.

"First-day returns aren't predictive for subsequent returns," says UBS' head of asset allocation Jason Draho. "IPOs can be attractive investments if you can get an allocation, but much less so if you're buying in the secondary market."

From 1980 to 2016, the average six-month return for IPOs is about 6 percent or 2 percent excess return, versus the over 18 percent average gain on the first day over the past 40 years, according to the data.

More recently from 2000 to 2016, the six-month absolute and excess return has been both negative.

[bluestarone]

14. So, wonder if this is being pushed by 401 k consultants?

[Mr. Sparkle]

15. This is not a good look for the stock market, when a worthless company can be worth so much.

[louis-t]

16. Can you imagine the price plummeting a month before he is allowed to sell

then he petitions a court somewhere to allow him to sell his stock before the price gets too low? "It's not fair!!! No one's ever been stopped from selling their stock. I'm treated so badly! This has never happened before! It's election interference!!"

[former9thward]

19. He does not need to petition any court.

The agreement allows him to get a waiver from the Board of Directors to sell early if he wants.

[berksdem]

23. True...

but he is limited in the amount he can sell off.

[SKKY]

17. We've all seen the movie "Game Stop". We know how this ends...

...everything Trump touches turns to crap. This will be no different.

[Pluvious]

31. Don't you mean the move called "Dumb Money?" (Sony Pictures)

I really enjoyed this one

[IronLionZion]

35. Billionaires deserve a good short squeeze to make them squeal

All signs indicated a pump and dump scheme. The real surprise was the early pumpers like Keith Gil never dumped it.

[RainCaster]

22. It's called "Pump and Dump"

A classic stock manipulation. This is from the article at the top.

One user urged conservatives to “get behind the DJT stock and sent it over $100 per share” to “drive the liberals insane!” Another declared: “Get yourself a piece of #DJT stock if your a true MAGA supporter.”

The truth is in the quantity of shares being traded and how many big bulk purchases are being made by investors.

[Picaro]

24. This won't last

This is a company that has minimal revenues and a very small client user base when compared to any of the major social media players.

The current valuation is not sustained by anything.

Truth Social will pop like a soap bubble.

[Kennah]

25. Closed at $57.99, High was $79.38

https://www.google.com/finance/quote/DJT:NASDAQ?hl=en&window=5D

[pfitz59]

27. Which Trump proxys are moving behind the scenes?

Trump himself is restricted from selling, but what of his false fronts?

[LetMyPeopleVote]

30. DJT is a meme stock that relies on the greater fool/idiot theory

Meme stocks rely on the greater fool theory. I was amused to see that DWAC/Trump Media is classified as a meme stock where the value is due to personality and not due to the real value of issuer of the meme stock. This article is a good discussion of the meme nature of DWAC/TMT.
https://www.vanityfair.com/news/donald-trump-truth-social-media-merger

Trump’s financial future now hinges on some of the strangest fads in corporate finance—meme stocks, SPAC deals, and cult-of-personality investing. If Trump can find a way to act fast, it might just be the bailout he desperately needs.

Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. It’s chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. That’s the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......

DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way that’s significantly divorced from the reality of their underlying business. Combine those two trends and you’ll start to see why Trump’s media company could be valued at roughly $9 billion if it merges with DWAC.

Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the “greater fool theory of investing,” meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. “Here you’ve got ideology involved [too]—as far as I can tell, the vast majority of DWAC investors are Trump political investors, and they’re to some degree putting their money where their mouth is… My suspicion is most of them have bought the stock as a show of political support.” In this way, Trump is conducting yet another public fundraising from his supporters—this time through the public markets.

Idiots who purchase meme stocks are betting that they can get out before the other idiots figure out that the stock is worthless

[Pluvious]

32. Reminds me of Al Bundy explaining to...

... Peg how her junk at their garage sale was never going to sell

😝

[IronLionZion]

34. I encourage MAGA patriots to buy the stock now, go all in, the retirement fund, college fund, bet the farm

Then blame Deep State when it crashes and burns.

Stock analysts have stated fundamental valuation is no more than $2 a share, and that's generous. $73.50 a share is a guaranteed loss for the "fans who purchased shares as a show of support for the former president".

[Torchlight]

37. In '77, I bought a Pet Rock for $4.19, and now it's worth a staggering

$4.89 on e-Bay. I think mine was the sounder investment (not to piss off anyone who kneels before the sacred cow of the free market though... heaven's forbid!)

[Rebl2]

41. Disgusting