Donald Trump’s social media platform, Truth Social (DJT), made a splash on its first day of trading on the Nasdaq, closing up 16% after initially rising more than 50% earlier in the session. This marked a significant milestone for Trump Media & Technology Group, the parent company of Truth Social, as shares under the ticker symbol “DJT” soared just under $58.
The success of Truth Social is attributed to its merger with special purpose vehicle Digital World Acquisition Corp. (DWAC) in a deal approved by shareholders last week. Prior to the merger, DWAC had been on the public market since 2021. Founded by Donald Trump after being banned from major social media platforms like Facebook and Twitter following the Jan. 6 Capitol riots in 2021, Truth Social now has Trump reinstated on these platforms.
Trump will maintain control over roughly 60% of Truth Social with nearly 79 million shares, valuing the company at more than $5 billion based on current trading levels. However, Trump will have to wait before cashing in on his shares, as stakeholders are subject to a six-month lockup period before selling or transferring shares, except in special circumstances approved by the board. According to an SEC filing, Trump Media reported a loss of $49 million in the first nine months of last year with revenue of $3.4 million.
Additionally, there is a notable level of short interest in DWAC stock, with about 11% of outstanding shares being shorted, compared to the average 3% to 4% in public companies. This indicates some skepticism in the market about the future performance of Truth Social.
As former President Trump faces legal challenges and prepares for a potential 2024 presidential rematch against Joe Biden, the success of Truth Social will be closely monitored. Despite the hurdles, Trump’s social media venture has made a strong debut and is positioned to shake up the industry.
Written by Alexandra Canal, a Senior Reporter at Yahoo Finance. Follow her on Twitter (@allie_canal), LinkedIn, and email her at [email protected].
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