Trump’s social media stock soars following his win, boosting his wealth by $1 billion.
CNN’s New York: It wasn’t just the White House that Donald Trump won. On Wednesday, his wealth increased by almost $1 billion as well.
Owner of Truth Social After CNN and other media outlets predicted that Trump would win the election, the value of Trump Media & Technology Group, his social media company, is soaring this morning.
In premarket trading, Trump Media’s stock, which is traded under the ticker symbol “DJT,” surged 35%, suggesting a staggering market value of about $9 billion.
The conservative social media company, which generates little income and is losing money, has Trump as its largest shareholder.
Premarket trade has increased the value of the president-elect’s 114.75 million shares from $3.9 billion at the end of trading on Election Day to around $5.3 billion. Naturally, those are merely profits on paper, and in reality, Trump would find it challenging to sell a large portion of those shares without driving the price down.
Trump Media has been a stand-in for speculators’ predictions about the outcome of the election for months.
The company’s share price plummeted to record low after record low in September as Trump’s chances of winning the election decreased.
However, Trump Media’s value more than tripled between September 23 and the end of October, a startling increase fueled by wagers that Trump would win the presidency.
The CEO of Tuttle Capital Management, Matthew Tuttle, told CNN that he is not shocked by Wednesday’s spike in Trump Media stock since it is the “only pure play” for traders to bet on a Trump victory.
According to Tuttle, there has likely been a “massive short squeeze” in recent days due to poorly placed short bets against the stock’s valuation. In order to reduce their losses, traders who bet against a stock’s quick price increase are compelled to buy it back. The price then increases much more as a result.
In reference to a survey released last weekend that showed Trump no longer leading in a state he had won twice, Tuttle stated, “A lot of people got fooled by the Iowa poll.”
Trump Media & Technology Group stock tracker
Latest price on the Nasdaq Stock Market
Data last updated November 6, 2024 at 9:56 a.m. ET
Source: CNN Business
Graphic: Matt Stiles and Byron Manley, CNN
Nevertheless, the cost of Trump Media is difficult to understand. Now valued at over $9.5 billion, it quadruples JetBlue and more than doubles Macy’s.
This is true even if Truth Social is a relatively tiny player on social media and Trump Media generates very little cash.
“The scope of his victory is helpful, but they need to develop some kind of long-term plan,” Tuttle stated.
On Tuesday afternoon, Trump Media revealed that its revenue for the third quarter had dropped 5% to barely $1 million.
Michael Block, co-founder and chief operating officer of AgentSmyth, an autonomous AI agent platform for investing ideas, stated that “fundamentals don’t matter.”
According to Block, the market worth of a media company that is associated with “someone shaping up to be perhaps the most consequential person of the 21st century” is reflected in its valuation.
“Ignore the run of bankruptcies during the last forty years. Consider the value of the brand right now,” Block advised.