Following its premiere on the New York stock exchange on Tuesday, stocks in Donald Trump’s social media venture saw a significant rise, enhancing the ex-US president’s shares to a value of $4.6 billion. Trump Media & Technology Group, the body behind the Truth Social platform, saw shares reach as high as $79.38 each from the previous day’s price of $49.95 and ended the day 16% higher at $57.99. Due to its extreme volatility, trading was stopped for several minutes.
Following a merger with the blank-cheque organisation Digital World Acquisition Corp on Monday, TMTG is now listed on the Nasdaq under the ticker symbol DJT, representing Trump’s initials. With ownership of 58% of the shares in the merged entity prior to accounting for dilution, Mr Trump greatly benefitted from the price surge.
Ahead of what is predicted to be the US’s costliest presidential election campaign, the ex-President is dealing with a multitude of legal and financial challenges. A judgement by a New York appeals court on Monday means Mr Trump could delay a $464 million fraud enforcement by paying just $175 million. In spite of his assertion that securing a bond for the full value would be “impossible”, he has been given 10 days to source the bond money. It’s unlikely however that the increase in TMTG’s share price will assist him in securing the funds due to an agreement that bars him from selling his shares for six months.
If permitted by the board, Mr Trump could bypass this agreement, but the company’s stock price would likely plummet due to the size of his share. TMTG’s market valuation now stands at nearly $12 billion. The sudden hike in share price also increased the wealth of three of Mr Trump’s ex-business associates who had lodged legal cases claiming their TMTG stakes had been heavily diluted.
Miami businessman Patrick Orlando, who founded DWAC, has also taken legal action against the company, alleging he is owed a more substantial share distribution. His TMTG stake is now estimated at over half a billion dollars. Orlando’s share includes 5.5 million “founder shares” valued at over $350 million, and his complete stake being roughly $530 million. Former Apprentice contestants Wes Moss and Andy Litinsky together have shares equalling approximately $436 million.
United Atlantic Ventures, a partnership enterprise, launched a lawsuit prior to a shareholders vote on the proposed merger with DWAC. They alleged that a late surge in shares was manipulated by Mr Trump and his team. Benefiting from this surge are ex-government individuals like Devin Nunes, a former congressman allied with Trump, who currently heads TMTG and has an ownership of shares valued at $8 million.
Despite never generating profits, TMTG continues to run Truth Social and intends to start a streaming service in the future. TMTG lost $49 million within the first nine months of 2023 but managed to earn a revenue of $3.4 million. In the past half a year, DWAC’s share price has risen almost threefold due to the support of retail traders. This has made DWAC quite a buzzword on the WallStreetBets Reddit page where stock trading ideas are discussed.
© The Financial Times Limited 2024.