NEW YORK: Shares of Donald Trump’s social media company rose about 16 percent in the first day of trading on the Nasdaq, boosting the value of Trump’s large stake in the company as well as the smaller holdings of fans who purchased shares as a show of support for the former president.
Trump Media & Technology Group Corp. merged Monday with 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.
Shares closed at $57.99, up 16.1 percent, giving the company a market value of $7.85 billion. At one point the stock was up about 59 percent. Trump holds a nearly 60 percent ownership stake in the company, now worth about $4.6 billion.
Many of those investing in Trump Media are small-time investors either trying to support Trump or aiming to cash in on the mania, instead of big institutional and professional investors. Those shareholders helped the stock of Digital World more than double this year in anticipation of the merger going through.
Truth Social launched in February 2022, one year after Trump was banned from major social platforms including Facebook and X, formerly Twitter, following the Jan. 6 insurrection at the US Capitol. He’s since been reinstated to both but has stuck with Truth Social.
On Truth Social Tuesday, users were posting about being shareholders or seeking tips on how to buy shares.
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.”
A day earlier, Trump Media CEO 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.”
Despite the enthusiasm, investors could experience a bumpy ride. For one, they’re betting on a company with uncertain prospects of turning a profit. Trump Media lost $49 million in the first nine months of last year, when it brought in just $3.4 million in revenue and had to pay $37.7 million in interest expenses.
In a recent regulatory filing, the company cited the high rate of failure for new social media platforms, as well as its expectation that its operations will lose “for the foreseeable future” as risks for investors.
Research firm Similarweb estimates that Truth Social had roughly 5 million active mobile and web users in February. That’s far below TikTok’s more than 2 billion and Facebook’s 3 billion — but still higher than other “alt-tech” rivals like Parler.
However, Trump Media has said it doesn’t keep track of some numbers that rivals use as key measures of their performance, such as average revenue per user or active user accounts. It says it wants to focus on the long-term instead of “short-term decision-making.”
For that long term, though, skeptics see struggles ahead for a company that’s estimated to have far fewer users than rivals in a business where gaining a critical mass is key.
“I think there is a possibility of, sooner or later, the stock price falling by 95 percent,” said Jay Ritter, a professor and expert on initial public offerings of stock at the University of Florida’s Warrington College of Business.
Brian Dunn, director of the Institute for Compensation Studies at Cornell University, compared the fervor for Trump Media shares to the meme stock craze that boosted shares of companies such as GameStop and AMC Entertainment to exorbitant heights in 2021.
“Like any meme stock or fad, as long as there’s a greater fool to buy you out for what you paid for it, than you can continue to prosper,” Dunn said, warning that small investors “could end up holding the bag when the music stops.”
On Monday, Trump told reporters that “Truth Social is doing very well. It’s hot as a pistol and doing great.” On Tuesday, he posted “I LOVE TRUTH SOCIAL, I LOVE THE TRUTH!,” on the platform.
The company, which is based in Florida, said in a recent regulatory filing that it “is highly dependent on the popularity and presence of President Trump.” Trump Media has acknowledged that there are risks associated with Trump’s outsized influence.
If the former president were to limit or discontinue his relationship with the company for any reason, including due to his campaign to regain the presidency, the company “would be significantly disadvantaged,” it said in a filing ahead of the merger with Digital World.
Acknowledging Trump’s involvement in numerous legal proceedings, the company noted that “an adverse outcome in one or more” of the cases could negatively affect Trump Media and Truth Social.
Another risk, the company said, was that as a controlling stockholder, Trump would be entitled to vote his shares in his own interest, which may not always be in the interests of all the shareholders generally.
Trump’s social media company gains in its first day of trading on Nasdaq
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Trump’s social media company gains in its first day of trading on Nasdaq
- Many of those investing in Trump Media are small-time investors either trying to support Trump or aiming to cash in on the mania, instead of big institutional and professional investors
Philippines says China fired flares toward its patrol plane in the disputed South China Sea
- “The Bureau of Fisheries and Aquatic Resources aircraft recorded video footage of three flares fired from the reef toward the aircraft during its lawful overflight,” said the Philippine coast guard
- The Philippine patrol plane spotted a Chinese hospital ship, two Chinese coast guard ships and 29 suspected militia ships anchored in the waters off Subi
MANILA: Chinese forces fired three flares from an island toward a Philippine plane undertaking a routine patrol Saturday in the disputed South China Sea, but the incident did not cause any problem and the aircraft proceeded with its surveillance mission, the Philippine coast guard said.
It was not immediately clear how far the flares that Filipino officials said were fired from the Chinese-occupied Subi Reef were from the Cessna Grand Caravan aircraft of the Philippine fisheries bureau.
Chinese officials did not immediately comment on the incident, Beijing has claimed virtually the entire South China Sea, a key global trade route, and has vowed to staunchly defend its sovereignty. Chinese forces has fired flares from its occupied islands and from its aircraft as a warning for foreign planes to move away from what it calls its airspace in the disputed waters.
“The Bureau of Fisheries and Aquatic Resources aircraft recorded video footage of three flares fired from the reef toward the aircraft during its lawful overflight,” said the Philippine coast guard, which carried out Saturday’s surveillance flight with the fisheries agency.
“These flights aim to monitor the marine environment, assess the status of fisheries resources and ensure the safety and welfare of Filipino fishermen in the West Philippine Sea,” the coast guard said, using the Philippine name for the stretch of the South China Sea that Manila claims.
The Philippine patrol plane spotted a Chinese hospital ship, two Chinese coast guard ships and 29 suspected militia ships anchored in the waters off Subi, the Philippine coast guard said.
Subi is one of seven disputed and mostly submerged reefs which China turned more than a decade ago into what are now island bases in the Spratlys, the most hotly disputed region of the South China Sea. The artificial islands are protected by a missile system and three of them have military-grade runways, according to US and Philippine security officials.
Aside from Subi, the Philippine patrol plane flew near six other disputed islands, reefs and atolls, including Sabina, an uninhabited disputed shoal, where it monitored a Chinese navy ship. “This vessel repeatedly issued radio challenges against the Bureau of Fisheries and Aquatic Resources aircraft while it was flying well within Philippine sovereign rights,” the Philippine coast guard said.
“All safe and mission accomplished,” Jay Tarriela of the Philippine coast guard said of Saturday’s surveillance flight.
The United States has no territorial claims in the sea passage but has patrolled the waters for decades and repeatedly warned it’s obligated to defend the Philippines, its oldest treaty ally in Asia, if Filipino forces come under an armed attack, including in the South China Sea.
Vietnam, Malaysia, Brunei and Taiwan have also been involved in the long-seething disputes in the resource-rich waters.
