Shares of Trump Media & Technology Group (TMTG, Financial) saw a nearly 20% increase prior to their Nasdaq debut, marking a significant moment more than two years after its merger with a blank-check company was first announced. This surge in premarket trading places TMTG's valuation at an impressive $8.71 billion.
Donald Trump, holding a majority stake in TMTG, finds his share now valued at nearly $4 billion. However, he faces a six-month lock-up period during which he cannot sell or leverage his shares.
Amidst four criminal trials, Trump has encountered challenges in funding his presidential campaign and covering legal costs. A recent legal victory in New York, preventing the seizure of his assets, has provided some financial relief, aiding in his campaign fundraising efforts and the maintenance of his real estate ventures.
The financial infusion of $300 million into Truth Social, TMTG's social media arm, comes at a crucial time as the platform reported a $10.6 million operational loss in the first nine months of 2023. This deal has positioned TMTG among the top 15 most actively traded shares on Nasdaq early in the trading day.
TMTG's performance also reflects the political support for Trump, with the value of shares in the associated shell company, Digital World Acquisition, nearly tripling this year. This growth signifies the market's bet on Trump's political comeback, despite critical voices like Reddit user Chester-Ming from the "wallstreetbets" forum cautioning about the company's fundamentals and Trump's potential divestment from Truth Social depending on his political future.
Digital World Acquisition's recent filing revealed Trump's possible divestiture from Truth Social and withdrawal from its management, contingent on his presidential bid's progress. The merger agreement, signed in October 2021, has faced scrutiny and was recently settled with the U.S. securities regulator for $18 million over disclosure inaccuracies, following shareholder approval and regulatory green light.
