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Donald Trump’s IPO just jumped 35% on Monday.
Trump merged the Trump Media & Technology Group with a SPAC called Digital World Acquisition.
Trump Media & Tech is now trading on the Nasdaq with the ticker DJT.
The stock closed Monday at nearly $50 per share.
Shares are up 186% YTD.
That gave Trump Media & Tech a market value of around $7 billion.
Let’s take a look inside Trump Media & Tech.
Truth Social is the focus of this new company. The company says…
“TRUTH Social’s mission is to end Big Tech’s assault on free speech by opening up the Internet and giving the American people their voices back.”
Truth Social currently has 5 million users.
The company has released financial results for the first 9-months of 2023.
During this period the company generated revenues of just $3.3 million. Meanwhile, the total net loss was $49 million.
The “go public” transaction will put over $300 million into the company’s bank account.
That cash can help cover future losses at Trump Media & Tech.
Why is this deal important for Trump?
The former President owns 58% of the company.
That values his stake is worth around $4 billion.
Forbes previously estimated that Trump’s net worth was around $2.5 billion.
So, this transaction tripled his net worth in a single day.
Trump’s shares will be restricted for a period of 6-months. It’s typical that insider shares are “locked-up” after the IPO.
However, Trump has control over the company.
The company’s directors could remove this restriction.
Trump personally faces ongoing legal battles. This includes a New York court requiring him to post a $175 million bond to avoid having his properties seized.
Mounting legal issues may encourage Trump to sell some of his DJT shares. Doing so might also be prudent – since 2/3 of his net worth are tied up with this stock.
Shares of DJT are disconnected from the financial performance of the company.
The stock istrading based upon Trump’s name and popularity with Republican voters.
Right now, investors are pumped to be jumping on the Trump bandwagon.
IMO it’s 100% speculation – similar to other MEME stocks. I say that without any judgement.
Ian
P.S. Do you own shares of DJT? Or are you considering adding the stock to your portfolio?
P.P.S. Got out skiing to enjoy the 12” of new snow to celebrate spring.
