Shares of Donald Trump’s Trump Media & Technology Group (TMTG) skyrocketed as much as 59% on Tuesday during its Nasdaq debut, buoyed by fervent support from the former U.S. president’s followers. The surge represents a potential financial windfall for Trump amidst mounting legal expenses. TMTG’s market capitalization surpassed $10 billion at its peak, an astounding figure considering the company reported an operating loss of $10.6 million in the first nine months of 2023 on revenue of only $3.4 million. Despite closing 16% higher at $57.99, valuing the company at nearly $8 billion, Trump’s majority stake in TMTG, valued at approximately $6 billion, faces lock-up restrictions for six months, limiting his ability to sell or leverage his shares.
The stock market debut of TMTG comes following its merger with blank-check company Digital World Acquisition Corp, initially announced in 2021 but marred by obstacles and delays. Since the merger, both Digital World and the newly listed TMTG have surged nearly 600%, solidifying TMTG’s status as a meme stock favored by retail traders. Despite concerns over the company’s rich valuation relative to its underlying fundamentals, investors remain cautious, with Thomas Hayes, chairman of Great Hill Capital, warning against betting against TMTG in the near term.