Written by: Jessy, Golden Finance
As the U.S. elections approach, Trump's trades are effective again, and Trump's own business empire directly benefits.
Trump Media & Technology Group (DJT) has risen over four times since September 24, currently priced at about $51.
Trump holds approximately 58% of the company, which was established in 2021. Its social product is 'Truth Social'. The establishment of this company was Trump's strategy to respond to being banned by several major social platforms in 2021.
It is reported that the daily active users on Truth Social do not exceed 100,000, and Trump Media & Technology Group has been in a state of loss since its establishment.
The rise in Trump Media & Technology Group's stock price is unrelated to the company's operating conditions; it is mainly due to speculative behavior betting on the 'Trump trade'.
Market value surpasses 'X', yet has been consistently losing money.
Trump Media & Technology Group was established in February 2021. It is a media and technology company rooted in social media, digital streaming, information technology infrastructure, and other fields. The company currently has social networking product TRUTH Social, video-on-demand product TMTG+, and news media product TMTG News, and plans to launch solution stack products in the future.
After the storming of the U.S. Capitol on January 6, 2021, Trump's Facebook and Twitter accounts were both banned, prompting him to create his own social media platform and establish Trump Media & Technology Group. Truth Social was launched on February 21, 2022.
From the design interface perspective, Truth Social is very similar to X, and it can be said that Truth Social has copied X.
However, now with the rise in Trump Media & Technology Group's stock price, Truth Social's market value has surpassed that of X. Currently, Trump Media & Technology Group's market value is about $10.3 billion, while X's valuation is $9.4 billion (X's market value is calculated based on Fidelity Investment values cited in disclosure forms submitted in September 2024).
However, Truth Social has not disclosed its user data, making it difficult to determine the exact number of users and their situation. However, according to Similarweb data, the company's daily active users were only 76,000 in the first half of this year.
Moreover, Trump Media & Technology Group has been in a state of loss since its inception. The operating income for Q2 2024 was only $836,900, and the net profit was -$16.368 million. The company's revenue also indicates that the current stock price is severely detached from its fundamentals.
Jay Rittell, a finance professor at the University of Florida, stated that there is no evidence that Trump Media & Technology Group will become a large, profitable company, and its stock price could even drop to $2 per share or lower.
Trump is the biggest beneficiary.
However, at present, the stock has seemingly become a 'MEME stock', with its price detached from fundamentals, instead driven by hot events and sentiment. As the U.S. elections approach, the stock's popularity will only increase.
Not only is the stock of Trump Media & Technology Group rising, but even a software company listed on the A-share market called 'Chuan Da Zhi Sheng' has seen its stock double in the past month. Essentially, both are 'MEME stocks' linked to hot topics and key events.
Not only supporters of Trump but also retail speculators are buying Trump Media & Technology Group's stock, and even institutions have purchased the stock this year. Currently, institutional investors hold 10.59% of the company's shares, with many completing their positions in the second quarter of this year. In July of this year, Trump was selected as the Democratic presidential candidate, and institutional actions also highlight the importance of betting on the 'Trump trade' in an election year.
The biggest beneficiary of the stock price increase is still Trump himself. As early as 1995, Trump Hotels and Casino Resorts was listed on the NYSE, also using 'DJT' as its trading code, but the company went bankrupt in 2004 and was delisted. This time, the listing of Trump Media & Technology Group marks the return of a company controlled by Trump and the 'DJT' trading code to Wall Street after nearly 30 years.
Owning a publicly listed company and holding most of its shares is undoubtedly an important channel for Trump to monetize.
According to the Wall Street Journal, Trump's overall net worth is between $7.5 billion and $10 billion. Most of Trump's personal net worth is related to his stake in Trump Media & Technology Group. As the largest shareholder, Trump owns about 58% of the company, currently valued at approximately $6 billion.
If Trump were to sell the shares he holds in Trump Media & Technology Group, the stock would likely see a sharp decline.
