Donald John Trump, the former president of the United States, is now the dominant shareholder of a newly public company trading on the Nasdaq under the ticker “DJT”. Despite being a nascent, unprofitable social media platform, the company has managed to make Trump billions on paper, a testament to the unpredictable nature of the stock market.
However, Trump cannot cash in on this windfall by selling his shares or borrowing against them for six months, unless given the green light by the company’s board, which is largely composed of his supporters. This may pose a challenge for Trump, who needs to post a significantly reduced $175 million bond for the civil tax fraud charges brought against him and his other companies.
Trump’s new company, which generates minimal revenue and operates at a loss, should serve as a cautionary tale for potential investors. Meanwhile, Trump is attempting to monetize his social media platform, Truth Social, by selling “God Bless the USA” Bibles for $59.99.
As CNN’s Matt Egan highlights, the company’s fundamentals are far from impressive: “Trump Media generated just $3.4 million of revenue through the first nine months of last year, according to filings. The company lost $49 million over that span.” Furthermore, Truth Social, the company’s primary asset, has fewer than 500,000 monthly active users, significantly less than platforms like Facebook and TikTok, and is losing users at an alarming rate.
The company’s stock could potentially be inflated by Trump’s supporters, but the reverse could also be true. If Trump were to sell his stock, its value could plummet due to the disassociation with his brand. The top institutional investor in the company is Susquehanna International Group, whose founder, Jeff Yass, is a significant donor to Republican causes and a major investor in ByteDance, the parent company of TikTok.
There are clear ethical concerns if Trump were to return to the White House while a company bearing his initials is publicly available. It could potentially serve as a platform for investors seeking to curry favor, a situation not dissimilar to the controversies surrounding Trump’s Washington, DC, hotel during his first term in office.
Investors should also be wary of Trump’s history of bankruptcy. His previous public company, a casino company also trading under the ticker DJT, went bankrupt and was delisted from the New York Stock Exchange between 1995 and 2004.
Despite these concerns, a bubble appears to be forming around the Trump Media & Technology Group, drawing comparisons to “meme stocks” like GameStop and AMC. These stocks were temporarily buoyed by small individual retail investors, despite the companies’ lackluster fundamentals.