Meet the Newest Meme Stock: Trump Media
- Oops!Something went wrong.Please try again later.
Donald Trump’s social media enterprise officially became a publicly traded company on Tuesday, with its stock price jumping 16% to $58 a share. We’d like to take this moment to welcome Trump Media, trading under DJT, to the world of meme stocks.
At Tuesday’s closing stock price, Trump’s stake in Truth Social’s parent company is worth over $4.5 billion. But don’t get too excited Mr. Trump. Short sellers are flooding the stock, according to Yahoo Finance, hoping to make a quick buck on the demise of Truth Social’s stock price. With 11% short interest, DJT looks almost certainly like the next big meme stock, but this time, it’s tied to a former president’s net worth.
A quick visit to r/wallstreetbets confirms that meme stock traders are hopping onto DJT on the first day of trading. The subreddit is plastered with posts from day traders placing “puts” and “shorts” on Trump’s media company. Some of these investors will make thousands in the short term, but it’s not a good sign for anyone looking to invest long-term in Trump Media.
Though DJT’s stock price is subject to major swings as a meme stock, the former president may be increasingly reliant on it as a source of capital. Trump has reportedly struggled to find a bond issuer for a $454 million fee he’s required to pay a New York court in connection to a civil suit from Attorney General Letitia James. That bond has been reduced to $175 million in the near term, but he will have to pay the full bond ultimately.
Many of us remember the GameStop saga of 2021, where the stock prices of tired corporations were jolted around with new life, largely stemming from the Reddit group r/wallstreetbets. The same happened to the movie theater chain AMC, Bed Bath and Beyond, and now it appears to be happening to our former President’s social media company.
Trump Media, a social media company with a few million users, has a current valuation of roughly $8 billion based on current trading, according to Bloomberg. For reference Reddit, which is profitable and has over a billion users, was worth $6.5 billion when it went public. That valuation makes a little more sense, though Reddit is also subject to meme stock traders.
For now, we welcome DJT to the world of meme stocks. It’s in for a wild ride, full of unexpected turns that could result in Trump gaining or losing billions of dollars every day. In a way, it’s fitting that former president’s net worth is now tied to a meme stock that’s as volatile as he is.
