TRUTH SOCIAL OWNER SOARS AFTER FLOAT SETS UP £3.6BN WINDFALL FOR DONALD TRUMP
Shares in Donald Trump’s social media company closed 16 per cent higher on Tuesday after it debuted on New York’s Nasdaq stock exchange.
Trump Media & Technology, which owns the Truth Social platform, soared more than 50 per cent to reach a peak market capitalisation of $10bn (£7.9bn) before paring gains later in the day. Trading was briefly halted due to volatility.
The listing of Trump Media could net the former US president around $4.6bn (£3.6bn) if it hovers around its Tuesday closing price of $57.99. He owns 79m shares, or a 60 per cent stake, which he cannot sell for six months.
It has gone public via a so-called “blank check” merger with special purpose acquisition company (SPAC) Digital World Acquisition and has the ticker “DJT” – a reference to Trump’s initials.
SPACs offer firms a route to the public markets without the rigmarole of an IPO. They typically raise money from investors through IPOs before finding a private company to take public.
Trump Media has struggled since it launched Truth Social in February 2022. The firm lost $49m in the first nine months of last year, bringing in just $3.4m in revenue.
It has generated sales of only around $5m since 2021 and said in a recent regulatory filing that it expected to remain lossmaking “for the foreseeable future”.
Meanwhile, Digital World has received a boost from retail investors promoting it as a “meme stock” on platforms like Reddit and Truth Social. Its shares soared as much as 44 per cent at the open on Tuesday.
The float of Trump’s social media firm comes as he fights costly legal battles ahead of his challenge to Joe Biden in November’s presidential election.
The first of his four criminal trials, over a “hush money” payment he authorised to porn star Stormy Daniels shortly before the 2016 election, will begin on 15 April.
Separately, a New York court handed Trump a lifeline last week after time ran out for him to secure a bond covering penalties of more than $454m from a civil fraud case. He is now required to post $175m within 10 days.
Trump Media chief executive Devin Nunes, a former Republican congressman, said: “As a public company, we will passionately pursue our vision to build a movement to reclaim the internet from big tech censors.”
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