Trump Media stock ticker DJT debuts after DWAC merger

Trump Media stock ticker DJT debuts after DWAC merger

In this photo, a smartphone displays the logo of Donald Trump’s Truth Social app on March 25, 2024.

Anna Barclay | Getty Images

The stock price of Donald Trump’s social media company jumped more than 50% minutes after it began public trading under the ticker symbol DJT on Tuesday morning.

Trump Media & Technology Group trading was briefly paused due to volatility from the rise before resuming around 9:40 a.m. ET. As of 9:50 a.m., more than 6.5 million Trump Media shares had changed hands

The ticker made its debut on the Nasdaq Stock Exchange nearly three decades after the former president used it to great fanfare in 1995 to launch his publicly traded hotel and casino company.

This stock was ignominiously delisted from the New York Stock Exchange nine years later.

The symbol “is a direct tribute to the company’s former chairman and director and the 45th President of the United States, Donald J. Trump,” Trump Media said in a statement

“We believe DJT’s commencement of trading on the public markets is a testament to Americans’ demands for free speech platforms that reject Big Tech’s oppressive censorship,” the statement said.

News of Trump Media & Technology Group’s public trading is shown on television screens at Nasdaq Marketplace in New York City on March 26, 2024.

Michael M. Santiago | Getty Images

Trump Media’s merger with shell company Digital World Acquisition Corp. was completed on Monday and enabled the IPO.

Trump Media had a market valuation of at least $8.4 billion on a basic stock basis as of afternoon.

Trump is a majority shareholder in the company, whose directors include his son Donald Trump Jr. and other close allies of the former president.

SEC filings show Trump will hold 78.75 million shares of Trump Media, representing a 69% stake in the company, depending on the rate of stock redemptions by DWAC shareholders. With a share price of $75.57 around 2:30 p.m., that stake was worth nearly $6 billion on paper on a basic share basis

Trump is banned from selling his shares for six months under the terms of the merger. However, the company’s board of directors could grant him a waiver of this lock-up period.

Despite Trump Media’s relatively high market valuation, the company reported revenue of less than $3.5 million in the first three quarters of 2023 – that’s a million, not a billion – and reported losses more than ten times that .

The company’s “finance” website contains no information.

On its final day of trading Monday under the DWAC ticker, the company’s shares rose more than 35% after a New York appeals court reduced the amount of a bond Trump would have to post to stay the forfeiture on a business fraud charge to $454 million. His verdict was reduced to $175 million while he appeals the case.

The company’s closing price on Monday was just under $50 per share.

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Trump’s prominence helped make the Trump Media deal with DWAC the highest-profile special purpose acquisition company (SPAC) merger ever.

The company’s shareholders may dream that the Truth Social app platform will increase its market share enough for the company to make a profit. Perhaps its growth could even accelerate if Trump is elected president in November.

But right now, Trump Media, like the previous company that traded under the ticker symbol DJT, is a money loser.

Trump Media reported losses of $49 million for the first nine months of 2023, more than 14 times revenue.

When Trump Hotels and Casino Resorts went public in 1995 under the DJT ticker at $14 per share, it also made headlines.

Donald J. Trump at his company’s casino, Trump Taj Mahal in Atlantic City, New Jersey, on March 16, 1990.

News Day | Getty Images

It made Trump personally money for years.

According to a 2016 Washington Post article about the company, Trump received more than $44 million in salaries from the company over a decade, despite the company repeatedly failing to make a profit.

After losing $1 billion, Trump Hotels filed for bankruptcy in November 2004, the same year DJT was delisted from the New York Stock Exchange.

“I don’t think it’s a failure, it’s a success,” Trump said in a 2004 interview with NBC News, after the bankruptcy filing listed $1.8 billion in debt and the stock at about 50 cents traded per share.

“In this case, it was just something that worked better than other alternatives,” he said of bankruptcy.

“It’s actually just a technical thing, but it worked.”

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2024-03-27 12:50:43