- By Natalie Sherman
- Business Correspondent, New York
image source, Good pictures
Shares of Donald Trump's media company rose as the company formally debuted on the stock market.
Shares crossed $70 in early trading, giving the company a market value of more than $9bn. They ended the day at around $58, still up 16%.
The long-awaited moment will see Trump pay more than $200 million in the media & technology conglomerate, handing the former president more than $4bn in shares.
Analysts say this is far more than the company's performance warrants.
Trump Media's Truth Social, a Twitter-like service, lost nearly $50 million in the first nine months of last year, generating just $3.3 million in revenue.
8.9 million accounts have been created from the site, which launched in 2022 as an alternative to mainstream sites like Facebook, but it's unclear how many are active.
By comparison, the recently listed Reddit currently has a market value of around $11bn. It has over 70 million users and brought in $800 million in revenue last year.
Christy Marvin, chief executive of SpaceSider, compared Trump Media – which trades under the DJT ticker for Mr Trump's initials – to a meme stock in which prices are disconnected from business opportunities.
Interest in the Trump media has been fueled by individual investors, as opposed to Wall Street firms, many of whom are outspoken Trump supporters.
“Everybody expected a little bit of crazy trading today, and it has,” he said. “The real question is, nobody knows how to trade a week, two weeks from now.”
The deal to enlist Trump Media was originally announced in 2021.
The move was accomplished by merging with Digital World Acquisition Corp., a publicly listed shell company known as a SPAC, which was created expressly to buy a company and take it public.
The deal was delayed by government investigations and other hurdles, but regulators cleared it earlier this year and Digital World shareholders voted in favor last week.
Ahead of its listing on the Nasdaq exchange, Trump media officials called it a “pivotal moment” for the company — and the broader media landscape.
“As a public company, we will passionately pursue our vision to build a movement to reclaim the internet from Big Tech censors,” Trump Media Chief Executive Devin Nunes said.
“We will continue to fulfill our commitment to Americans to serve as a safe harbor for free expression and to stand up to the ever-growing army of suppressors of speech.”
The introduction comes at a critical time for Mr Trump, who is struggling for cash to pay legal fines and owns more than half of the company's shares.
He is currently barred from selling his assets for at least six months, making it difficult for him to tap the wind immediately.
The company's board, which has partners including one of his sons, could change that rule, but analysts said it was unlikely to happen immediately.
If Mr. Trump sells a significant portion of his holdings, that could affect the stock price.
Investors also face other risks related to Mr Trump's political fortunes and his 2024 presidential campaign.
A loss would be expected to affect stock prices, but a win would have the opposite effect, especially if it creates more demand from buyers who favor Mr Trump, said Michael Oelroge, a law professor at New York University.
However, Professor Oelroch said the current share price was “much higher than anyone thought its fundamental value would be”.
