Trading Trump: Truth Social’s first month of trading has sent investors on a ride
WASHINGTON — There have been lawsuits, short-selling and rampant speculation. Now, like Trump Media & As Technology Group approaches its first month as a publicly traded company, it’s clear that – like the man it’s named after – there’s nothing typical about the stock.
“If I woke up tomorrow and the stock was worth zero dollars or a hundred dollars, I wouldn’t be surprised,” said Matthew Tuttle, a professional investor who bought $800 worth of Trump Media stock last week when it was at an all-time low . A day later its value had increased.
“This isn’t about fundamentals, earnings numbers or anything I learned in business school about how a stock should move,” he said.
With Trump facing dozens of federal charges and hundreds of millions in legal fees, Trump Media went public on March 26 on the Nasdaq. Unlike many other stocks, it has been difficult for traditional analysts and investors to figure out where the price is headed.
Here are some key takeaways from experts and regulators that help explain why shares of Trump Media – ticker symbol DJT – have gone up and down, and why its performance continues to confound Wall Street expectations:
According to experts, the share’s volatility is linked to Trump Media’s most important asset: Trump himself. Trump Media operates the social media platform Truth Social, which Trump founded after he was banned from Twitter and Facebook following the January 6, 2021, Capitol riot. The former Republican president, who is his party’s presumptive nominee for the White House this year, is a prolific poster for Truth Social and has a legion of diehard followers.
“I LOVE SOCIAL TRUTH, I LOVE TRUTH!” Trump posted this on the day his company went public.
Most major investors have not chosen to buy the company’s stock. Trump Media, based in Sarasota, Florida, has lost a lot of money and is struggling to generate revenue, regulatory filings show. That doesn’t seem to have stopped Trump’s supporters from seizing the opportunity to invest in a part of him.
“It’s all unusual,” said Julian Klymochko, CEO of Calgary-based Accelerate Financial Technologies Inc.
“I call it the mother of all meme stocks,” he said, with an oft-repeated line about Trump Media. It’s the nickname given to stocks that get caught up in the buzz online and far exceed what traditional analysis says they’re worth.
Day 1 appeared to be a windfall for Trump, who owns about 65% of the stock, and other early investors: Shares rose 59% to $79.38. Trump’s wealth immediately grew to $8 billion on paper. But he couldn’t pay out the money because of a lock-up provision that typically prevents company insiders from selling newly issued shares for six months.
The stock began to trend downward, but not without almost daily rises and falls due to high trading volume. The trading was largely driven by individual investors who, according to Trump Media’s CEO Devin Nunes, believed “in our mission to create a free speech beachhead against Big Tech.”
Such retail investors tend to be less sophisticated day traders. Some united to become a powerful force during the COVID-19 lockdowns, when they mobilized online to pour money into stocks of struggling companies such as video game retailer GameStop and movie theater operator AMC Entertainment. Those investors pushed the companies’ shares to new heights, while big investors suffered big losses because they bet against the stock.
Recent posts in a Truth Social group dedicated to talking about the stocks often refer to buying them not just as an investment, but as a movement of “MAGA patriots putting our money where our mouths are.” ,” referring to Trump’s “Make America Great Again” movement. .
Truth Social launched in 2022 and the former president uses the platform the way he often used Twitter, now known as X: to spread disinformation, praise supporters and attack his political rivals.
Trump was reinstated to X in November 2022, although he has only posted to that site once since. He has otherwise remained at Truth Social, which had 18 million visits in the first three months of 2024, compared to 18 billion on
Trump Media’s prospects are unclear, despite optimistic statements from Trump and his executives. Nunes said last week that the company’s “financial position is very strong, especially for an early-stage technology company in this early phase of growth.”
However, according to Securities and Exchange Commission filings, the company lost nearly $58.2 million last year while generating just $4.1 million in revenue. The company has $200 million in the bank and no debt.
Trump’s retail investors appear to be ignoring the company’s fundamentals and betting that the former president will ensure the company succeeds, according to analysts and other experts.
They “think he’ll figure something out, he always has,” said John Rekenthaler, vice president of research at Morningstar Research Services. “And it’s true, he always lands on his feet. But the people who invest with him, they don’t always land on their feet.”
Financial advisors and experts are less optimistic about the prospects. They noted that Trump Media’s financial filings have provided no indication that the company is pursuing a strategy that will lead to profits. They also pointed out that the company’s leadership has little experience running a social media outfit.
The company’s executives and board members include Nunes, a former congressman and Trump ally, and one of the former president’s sons, Donald Trump Jr. The others include Kash Patel, a top national security adviser and official in the Trump administration, and Robert Lighthizer, the US trade representative under Trump.
It’s a recipe for a business crash, experts say.
“Sooner or later it’s going to get messy,” said Albert Choi, a law professor at the University of Michigan. He said it is highly likely that Trump Media will run out of money and be forced to liquidate or file for bankruptcy.
The company faces a unique risk, experts say: Trump is not known for being disciplined, especially on social media. Because he is a controlling shareholder, he could be fined or punished if he makes false statements about the company. This happened to Elon Musk, who was charged with securities fraud in 2018 after hinting that he would take Twitter private. Musk settled with the SEC for a $40 million fine and was forced to resign as Tesla’s chairman.
SEC documents also warn that Trump faces legal challenges that could threaten the company’s stability. A New York judge has issued a $454 million civil fraud judgment against Trump after concluding that he and others deceived banks and insurers by overstating their wealth on financial statements.
Trump has appealed the fine and posted $175 million in bail while the case is pending.
Trump, meanwhile, is on trial in New York on charges of falsifying company records as part of a scheme to suppress negative stories about him during his 2016 presidential campaign. He has been indicted twice in federal court: once on charges of trying to overturn the results of the 2020 election, and once on charges that he kept classified documents after leaving the White House. He has also been indicted in Georgia on charges of racketeering and conspiracy to potentially interfere with the 2020 election.
Trump Media is also the target of lawsuits. In February, Trump Media co-founders Andy Litinsky and Wes Moss, who met Trump on his reality show “The Apprentice,” sued the company to prevent Trump from diluting their 8.6% stake by increasing the authorized shares from 120 million to 1. billion. Trump immediately sued, arguing that they should forfeit their shares in the company because they had set it up improperly.
This is not the first time that Trump has led a publicly traded company. In 1995, Trump Hotels and Casino Resorts went public on the New York Stock Exchange under the same ticker symbol as DJT. The company lost money over the next nine years and declared bankruptcy.
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Associated Press writers Brian Slodysko and Alan Suderman contributed to this report.