FOLLOW US

Shares of Truth Social's parent company, Trump Media & Technology Group (TMTG), have experienced a turbulent journey since their Wall Street debut in March. Initially soaring, then crashing, and now making a robust recovery, the stock has dramatically increased the value of former President Donald J. Trump’s majority stake. It is now estimated at about $6 billion.

The stock's recent rally has bolstered Trump’s financial resources as he ramps up his presidential campaign and confronts substantial legal expenses stemming from multiple ongoing cases.

 On Wednesday, TMTG's share price closed around $53, nearing the $58 mark it hit on its first trading day, March 26.

Trump holds nearly two-thirds of TMTG.

 While Trump's gains are substantial, restrictions prevent major shareholders from selling shares or using them as loan collateral for at least six months. However, due to Trump's control over the company, the board could potentially waive these restrictions upon his request.

 Despite these constraints, the company's multibillion-dollar market valuation places it among established firms like American Airlines and Hasbro.

Billionaire Businesswoman Taylor Swift Trademarks “Female Rage: The Musical” as Eras Tour Takes Europe by Storm - USA Herald

Manhunt Intensifies for Framingham Rapist: Stephen Gale Identified with DNA Evidence - USA Herald

Google AI Retooled Search Engine: News Publishers Fear Traffic Decline - USA Herald

Trump Media Frenzied Trading 

The trading activity around TMTG is reminiscent of the mania seen with so-called meme stocks. Meme shares surge based on investor sentiment and momentum rather than traditional financial fundamentals. 

TMTG's journey began with the plan to create a conservative media giant centered on Trump after he was banned from social media following the January 6 attack on the U.S. Capitol.

 In 2022, the company launched Truth Social, which Trump uses to communicate with supporters and critique opponents.

TMTG aimed to go public through a merger with a special purpose acquisition company (SPAC). After a rocky start, including an investigation by the Securities and Exchange Commission (SEC), TMTG merged with Digital World Acquisition Corporation and started trading on March 26, 2022.

Trump Media's Market Presence

Despite its relatively small size in the social media landscape, Truth Social's app has been downloaded 10 million times since its 2022 launch. 

Trump is the majority shareholder, but other key figures, including Devin Nunes, the former Republican congressman who became TMTG's CEO in 2022, also stand to gain significantly.

Financial Performance

Financially, TMTG reported a loss of $58 million last year, with only $4 million in revenue from advertising on Truth Social. 

Despite the lack of significant developments at TMTG, the stock's performance often correlates with Trump's political fortunes and legal battles. 

For instance, the recent rise in share price coincides with positive developments of Trump's trial over miscategorized hush-money payments to Stormy Daniels during the 2016 presidential campaign.

Retail and Institutional Investors

TMTG's market listing through its merger with Digital World Acquisition Corporation has attracted over 400,000 individual investors, many of whom are Trump supporters and Truth Social users.

 Early investors in Digital World have seen significant gains, with the stock trading around $17.50 at the year's start.

Recent regulatory filings reveal that a few investment advisory firms, managing funds for wealthy clients, held notable amounts of TMTG shares as of the end of March. 

According to S&P Global Market Intelligence, Trump, corporate insiders, and an entity closely linked to TMTG own nearly 96% of the company’s stock. Retail investors hold about 3.9%, or roughly 5.4 million shares, while institutional investors own less than 1%.

TMTG has actively pushed back against short-sellers or investors betting on a stock’s decline. Short seller’s sent letters to stock exchanges and lawmakers to request investigations into alleged market manipulation.

 According to S3 Partners, a market research firm, short sellers have incurred paper losses of $216 million this year betting against TMTG.