Donald Trump's Truth Social Platform Surges in Stock Market Debut

Donald Trump's Truth Social platform soars in its first day of trading. Learn about the merger, ownership stakes, and future prospects.

Mar 26, 2024 - 11:53
Mar 26, 2024 - 11:54
Donald Trump's Truth Social Platform Surges in Stock Market Debut
Donald Trump Truth Social Platform Surges in Stock Market Debut

Donald Trump's new social media platform, Truth Social, made a dazzling entrance onto the stock market, surging over 30% on its opening day of trading. This remarkable achievement was witnessed on the Nasdaq early Tuesday.

Truth Social is part of Trump Media & Technology Group, the parent company, which saw its stock, identified by the ticker symbol "DJT," reach a value of over $65 during mid-morning trading sessions.

The platform's journey to the stock market began with a merger with Digital World Acquisition Corp. (DWAC), a special purpose vehicle that has been publicly listed since 2021. Trump's inspiration for creating Truth Social stemmed from being banned from major social media platforms like Facebook and Twitter, which are now referred to as X, following the January 6 Capitol riots in 2021. Despite being reinstated on these platforms, Trump decided to launch his own social media venture.

Trump retains significant control over Truth Social, holding approximately 60% ownership, equivalent to nearly 79 million shares. Based on current trading levels, this stake is valued at over $5 billion. However, alongside this success, Trump faces challenges, including a $454 million fraud penalty and a fundraising deficit as he prepares for a potential 2024 presidential rematch against Joe Biden.

The merger agreement includes a six-month lockup period for stakeholders before they can sell or transfer shares, except under special circumstances approved by the company's board. Financial disclosures reveal that Trump Media reported a $49 million loss in the first nine months of the previous year, with revenue amounting to $3.4 million.

It's worth noting that short interest in DWAC stock, indicating bets on a decline in stock price, stands at approximately 11% of outstanding shares. This figure is significantly higher than the average short interest for public companies, typically ranging from 3% to 4%.

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