Donald Trump's Media Company Stock Surges
Donald Trump's media company, Trump Media & Technology Group (DJT), has seen its stock price surge in recent weeks, reversing a slump that had brought the stock to a post-listing low at the end of September. The stock jumped 18% on Monday, capping off three weeks of gains.
The volatility of DJT shares has prompted some analysts to label it a meme stock, or companies that trade on social media buzz instead of traditional analytical measures such as revenue growth and profitability. Money-losing DJT, whose revenue plunged 30% in the most recent quarter, has attracted a loyal base of Trump voters who tend to be small investors eager to put their money behind the former president.
Trump Media, whose core asset is social media asset Truth Social, announced Monday that its streaming service, Truth+ TV, is now available online.
DJT has also been seen as a proxy for Trump's potential electoral success in the November 5 election, with polls showing a tight race between Trump and Vice President Kamala Harris.
In recent days, the prediction market PredictIt.org switched from bettors giving Harris a better chance of winning to favoring Trump, who is now being given stronger odds. Prediction market Polymarket is also giving better odds to Trump.
Why is DJT Stock Going Up?
The $DJT group on Truth Social, which has more than 20,000 members, frequently includes posts from Trump supporters about their DJT purchases, often encouraging others to buy more.
While DJT stock has more than doubled since hitting a low on September 24, it's still far from its peak of $79.38 on March 26, the day it went public.
Trump Media slumped toward the end of September partly due to the expiration of a so-called monthslong lock-up period following DJT's initial stock sale. Such agreements are common with IPOs because they keep executives from quickly selling their shares, which could undermine the stock's price.
With the lock-up period expired, insiders including Trump Media's top executives can now sell their DJT stock.
While Trump has vowed not to sell his shares, another insider has sold a large stake, which could have contributed to the stock's September dip. The investor, United Atlantic Ventures, owned 7.5 million shares in Trump Media as of March, or about 4% of the company's outstanding shares, but sold them at an unspecified date, according to a regulatory filing last month.
United Atlantic Ventures is the creation of Andrew Litinsky and Wes Moss, two former contestants on "The Apprentice," the reality show that starred Trump. Litinsky and Moss had worked on the debut of the Truth Social network, but the relationship between them and the business soured, spawning multiple lawsuits.
Meanwhile, Trump remains the company's biggest shareholder, with an ownership stake of almost 60%, according to FactSet. At today's price, that values Trump's shares at about $3.4 billion.