Stock Markets

Trump defied political norms. With Truth Social, he tests the stock market.


Ever since its spectacular debut last week, which made former U.S. President Donald Trump one of the world’s 500 richest people, Trump Media & Technology Group has experienced a series of setbacks that would sink ordinary stocks.

But this highly charged social media investment may defy the odds, at least for a time.

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Some call Trump Media & Technology Group a “meme stock.” But in financial markets, confidence tends to hinge on fundamentals of finance, not on the risky ground of emotion or personal trust.

Trump Media first appeared on March 25 on the Nasdaq Stock Market, and share prices soared to $79 at one point. Then early Monday, the company revealed it had revenue of only $4 million last year with net losses of nearly $60 million. 

The stock lost 21% of its value in a day, closing just below its initial offering price of $49.95. As of Wednesday the stock was holding fairly steady, closing at $48.81 a share.

As an investment, Trump Media was always inherently risky. This was in part because it used an alternative way of going public, known as a special purpose acquisition company, or SPAC. The number of SPACs skyrocketed in 2020 and 2021, but the boom quickly faded as most of those companies’ share prices fell.

Some investors appear to have put their trust in Mr. Trump himself, despite the company’s weak fundamentals so far. Still others may be using their investment dollars to support the presidential candidate, almost like a political donation.

Ever since its spectacular debut last week, which made former U.S. President Donald Trump one of the world’s 500 richest people, Trump Media & Technology Group has experienced a series of setbacks that would sink ordinary stocks.

But this highly charged social media investment may defy the odds, at least for a time.

Some are calling it a “meme stock,” or one that attracts investors for emotional reasons. In this case specifically, some point to Mr. Trump’s followers who buy as a political statement. Whatever it is, Trump Media is banking on trust in a single individual, Mr. Trump, at least as much as on the potential growth of an entire company. Trump Media owns Truth Social, Mr. Trump’s social media network.

Why We Wrote This

A story focused on

Some call Trump Media & Technology Group a “meme stock.” But in financial markets, confidence tends to hinge on fundamentals of finance, not on the risky ground of emotion or personal trust.

“I don’t think it has to do with economics,” says Michael Klausner, a professor at Stanford Law School. “It’s all just a cult stock. [And] if the cult following is strong enough … maybe in the shorter run it isn’t risky, because there’s just such a willingness on the part of these people to keep buying it.”

Trump Media first appeared on March 25 on the Nasdaq Stock Market under the ticker symbol DJT, and share prices soared in its first few days of trading – surpassing $79 at one point. Then early Monday, in a regulatory filing, the company revealed it had revenue of only about $4 million last year and posted net losses of nearly $60 million. “The Company’s operating losses raise substantial doubt about its ability to continue as a going concern,” the filing warned.

The stock then tanked, losing 21% of its value in a day and closing just below its initial offering price of $49.95. On Tuesday, the stock rallied a bit, closing at $51.60, just minutes after a Bloomberg report that Mr. Trump was suing two of the company’s cofounders for “reckless and wasteful decisions” that damaged the company. The co-founders, in turn, have sued Mr. Trump for trying to dilute their stakes in the company. 



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