Get ready for the debut of a new social media ticker: DJT.
Donald Trump's struggling social media platform −founded after he was booted from the major social media platforms following the Jan. 6, 2021 Capitol riot − is set to begin trading on the Nasdaq stock exchange Tuesday under the ticker that bears his initials.
Truth Social’s parent company, Trump Media & Technology Group, will replace Digital World Acquisition after completing a merger with Digital World, a shell company that was already listed on the Nasdaq.
Shares of Digital World Acquisition Corp. surged 35% in regular trading Monday, gaining $13.01 to close at $49.95, erasing losses from Friday when investors voted to approve the deal. The opening stock price on Tuesday will be the same as Monday's closing price.
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Truth Social's parent company will have a market value of approximately $5.5 billion when it starts trading and Trump's stake will be worth about $3 billion.
The valuation is pricey for a company that has racked up tens of millions of dollars in losses since launching in 2021. Social media firm Reddit is valued at about $8 billion following its recent initial public offering. It had more than $800 million in sales last year. Trump Media's Truth Social platform generated $3.3 million in revenue during the first nine months of 2023.
“This is a stock where the market price is divorced from fundamental value,” said University of Florida professor Jay Ritter.
Ritter compared Truth Social to the wax-and-wane fortunes of AMC, the movie theater chain, and video retailer GameStop that got short-term boosts when online traders, mom-and-pop investors, small brokers and others organized on social media platform Reddit to buy up shares and face down hedge funds that were shorting the stocks.
“This doesn’t happen too often, but there are precedents,” Ritter said.
He estimated that the stock is worth about $2 a share and he predicted that trading in the stock would continue to be volatile as Trump supporters buy and sell shares.
A minor player in the social media universe where Facebook and TikTok command billions of users, Truth Social had about 494,000 U.S. mobile app users on iOS and Android in February and another 648,000 unique visitors in the U.S. to its website, according to research firm SimilarWeb. Both stats are down on a year-over-year basis, a 51% decline for mobile apps and a 20% decline for web visitors, the firm said. Truth Social does not disclose its user figures.