The Truth About Donald Trump Social's stock soared during its stock market debut, rising more than 43% by early Tuesday afternoon.
Trump Media & Technology Group, the parent company of Truth Social, went public on Tuesday morning under the ticker DJT, an abbreviation for Donald J. Trump. The stock is trading at $71.63 as of 1:32 p.m. ET, up nearly $22.
The listing was made possible through the merger of Trump Media and special purpose acquisition company Digital World Acquisition (SPAC). Digital World shareholders voted in favor of the merger on Friday, and Trump Media replaced Digital World on the Nasdaq market on Tuesday.
How much is Truth Social worth?
Before Tuesday's start of trading, Truth Social's parent company had a market value of about $6.8 billion. Mr. Trump owns about 79 million of the 135 million shares outstanding, making the company's stock worth about $4 billion.
That's a particularly high valuation for a company that has amassed tens of millions of dollars since its founding in 2021 and generated just over $3 million in revenue in the first nine months of 2023.
By comparison, last week's IPO of Reddit, a social media platform that brought in more than $800 million in revenue in 2023, was valued at about $6.4 million. The company's stock was trading at $70.90 as of 1:16 p.m. ET.
Derek Horsmeyer, a professor at George Mason University in Virginia, says it's “hard to believe” that Truth Social and Reddit are close in valuation, but that President Trump's social media company has seen the investment of loyal Trump supporters. said that it has been strengthened by
“It's difficult to find a reasonable metric to arrive at this valuation,” Horstmeyer said.
What is Trump's net worth?
Truth Social's initial public offering, at least on paper, would mean a significant increase in Trump's net worth.
President Trump will be prohibited from selling his stock holdings or using them as collateral for bonds for the next six months. Lifting this restriction would require approval from the Trump Media Committee.
President Trump has been ordered to post $175 million bail to appeal the full amount of a $454 million civil fraud judgment against him. He also lost a defamation case he advised columnist E. Jean Carroll and was ordered to pay $83.3 million.
Why is Truth Social's ticker DJT?
Research shows that well-known names, such as the initials of a former president, can influence a company's stock performance.
A 2006 study by psychologists at Princeton University found that stocks with easy-to-pronounce tickers tended to perform better during the first few days of trading. Another study conducted by Pomona College in 2019 validated previous research that found smart tickers tend to perform better because they are more memorable to investors.
What is Digital World Acquisition?
Digital World is a SPAC, also known as a blank check company. These publicly traded shell companies exist to acquire or merge with private companies and take them public.
The merger between Truth Social and Digital World was first announced in 2021, when the number of companies going public via SPACs skyrocketed. The investment vehicle has since faced criticism for being a bad deal for retail investors.
Why did Mr. Trump launch Truth Social?
Truth Social was founded after President Trump was banned from major social media platforms following the January 6, 2021, attack on the Capitol.
Contributor: Jessica Guynn, USA TODAY
