With its SPAC merger now complete, Trump Media & Technology Group (NASDAQ:DJT) stock begins trading on the Nasdaq today under the symbol DJT.
Early signs for investors are positive. Pre-market trade sent the price up 25% to over $60 per share. That brings the market capitalization of the company to over $8 billion.
The deal brings the net worth of the former president to $4 billion. That’s based on his holding 79 million shares in the new company.
Buying Some Trump
It’s unclear what investors are buying other than proof of their loyalty to the former president.
Truth Social, the social network that is the company’s main asset, had revenue of just $3.3 million during the first nine months of 2023. It had losses of $500 million. The merger gives it an immediate cash infusion of $300 million.
Trump faces a six-month lock-up period on sales by company insiders. This would normally make it hard for him to cash out. But it’s possible the board of the new company could waive that restriction, allowing him to sell stock quickly. Trump currently faces a $175 million bond in a civil fraud case. That was reduced from over $450 million by an appeals court on March 26.
Trump has full control over the new company. He owns about 60% of the common, plus a separate class of shares, giving him a 55% stake in shareholder measures. The board is made up entirely of Trump loyalists, including his son, Don Jr. The CEO is former Congressman Devin Nunes.
Trump was chairman of the Trump Media board before the merger was complete. But he is not listed as a member of the new company’s board. That is required to be a board chairman.
DJT Stock: What Happens Next?
The fate of investors’ cash and that of the former President are tied together. If Trump becomes President again, investors could make a lot of money. If he doesn’t, they won’t.
Shares are likely to trade like a Trump bond, rising and falling with poll numbers and campaign headlines.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
