Shares of Trump Media & Technology Group (TMTG), which includes the social network Truth Social and is majority-owned by former US President Donald Trump, made a strong debut on the New York Stock Exchange.
On the Nasdaq market shortly after the launch, they gained as much as 45 percent at a price of $73 per share. Later, they corrected part of the growth.
TMTG entered the stock market through a merger with publicly traded Digital World Acquisition. Trump holds almost 60 percent of the company, the value of his share was more than 5.7 billion dollars (roughly 133 billion crowns).
Share price soars even as Trump Media spends cash, piles up losses and loses users for its flagship product, Truth Social.
“It’s a very unusual situation. Stocks are largely disconnected from economic data,” Jay Ritter, a professor of finance at the University of Florida’s Warrington College of Business, said according to CNN news.
“The company doesn’t seem to have much value. There is no indication that it will become a large, highly profitable business,” Ritter continued. According to him, he is sure that the share price will drop significantly if the company spends the money it received from the merger.
TMTG lost $10.6 million in the first nine months of 2023 and posted a loss of $23.2 million in 2022. It raised money for its operations from convertible notes that can be exchanged for shares. Her social network Truth Social launched in February 2022.
