The stock performance of Trump Media & Technology Group (TMTG) blew past expectations as shares surged by more than 24 percent in its first week of trading after going public. The performance of the stock has exceeded expectations as experts predicted shares to perform negatively. Some pointed out that TMTG has not made a profit. The firm only made $3.3 million in revenues between January and September 2023. During this period, it registered losses worth $49 million. If the $3.3 million Jan.-Sept. revenue is estimated for the entire 2023, the $8.3 billion valuation would be around 2,500 times the company’s annual revenue, making the stock highly overvalued. “The stock will continue to be very volatile, with sharp moves up and down. But the long-term trend will be down … The company has about $2 in cash per share, but it will probably burn through that money and the most likely outcome is eventual bankruptcy.” However, not everyone thinks TMTG’s valuation is something that will crash soon. TMTG is seen as a meme stock—virally popular shares due to the high social sentiment attached to them. “All the things that people use to value a company become somewhat irrelevant. Because it’s about faith. It’s about being part of something bigger.” In the case of TMTG, the focus is on supporting President Trump, Mr. Hayes stated. “If you’re 30 or 40 or 50 percent of the country that wants to support
Donald Trump, there’s no more effective way to do that than to buy shares in this company and hold those shares until the
election period.” While some may look to short TMTG stock, believing it to be overvalued, Mr. Hayes advised against it, calling it a “bad move” since the investors have “shown that they are loyal through thick and thin.” Trump supporters are backing the venture. Teri Lynn Roberson, 52,
Texas, bought five shares of TMTG at $72, saying she does not care about the business’s fundamentals. “It’s mainly to support Trump and his legal battles,” Ms. Roberson said.
President Trump is due to post a $175 million bond in the
New York civil case that accuses him of inflating the value of his assets. “The one thing to me that separates a ‘meme stock’ from just any hot stock is a passion or fervor. I think it certainly applies in the case of DJT,” he stated. Lucas Mantle, head of data science at retail trading data specialist VandaTrack, said that there is “definitely potential” for TMTG to become a meme stock. However, “I just would like a bit more data on the magnitude of flows just to make that call.” In a statement to The Hill, Shannon Devine, a Truth Social spokesperson, said that the company will soon start expanding, which could eventually contribute to propping up the share prices. “With its transition into a public company, Truth Social aims to robustly expand and enhance the platform, while vehemently defending the free speech rights of our users. We are leading an entire movement to reassert free expression in the digital space.”
Trump campaign spokesperson Steven Cheung said that Truth Social “is hot as a pistol” and is the “only place, aside from speeches and interviews, where the
American people can get President Trump’s message directly from him.”