Trump Media & Technology Group (TMTG) witnessed a remarkable debut on the Nasdaq exchange, with its shares surging over 4% on Tuesday. This marked a significant milestone for the company, coming more than two years after its merger with a blank-check firm was initially announced.
With shares trading at $70.46, the company’s market capitalization reached an impressive $9.55 billion on an undiluted basis. However, trading under the new ticker “DJT” experienced a brief halt shortly after the opening bell due to volatility.
Former President Donald Trump’s majority stake in TMTG was previously valued at $5.55 billion, though lock-up restrictions may limit his ability to sell or leverage his shareholding for the next six months.
Commenting on the company’s valuation, Thomas Hayes, Chairman of Great Hill Capital, noted, “The valuation of the business appears rich relative to its underlying fundamentals, but I would not discount its potential in the near term. This valuation may reflect the enthusiasm of Trump supporters rather than a purely rational assessment of business prospects.”
TMTG emerged as the second-largest percentage gainer across U.S. exchanges, according to data from LSEG, and was listed as the most trending stock on the retail trader-focused social media and trading platform StockTwits.
Previously, shares of the blank-check firm Digital World Acquisition Corp, now known as TMTG, had surged by over 35% on Monday following the completion of its merger.
Trump’s Financial Challenges
Amid Trump’s legal battles and efforts to secure financing for his political campaign and legal expenses, a temporary halt to a ruling that would have prevented New York state authorities from seizing his assets provided him with some financial relief.
The injection of $300 million cash into Truth Social, a subsidiary of TMTG, aims to bolster the platform, which incurred operating losses of $10.6 million in the first nine months of 2023.
Furthermore, the company presents an avenue for Trump supporters to invest in his political resurgence, evident in the significant increase in the value of shares of shell company Digital World Acquisition earlier this year.
While some investors express optimism about the potential impact of Trump’s involvement, others caution against overlooking certain challenges such as weak fundamentals and possible dilution. Nonetheless, Trump’s ability to reduce his stake remains a factor to watch closely.