Donald Trump’s media company reaches $7.3 billion value on its first day of trading on the stock market

Shares in the media firm of former US president Donald Trump have surged on their stock market debut in New York, pushing his majority stake to a value of over $5bn (£4bn) on paper.

Trump Media & Technology Group (TMTG), the platform for his social media platform, Truth Social, rose by 40% when trading began on the Nasdaq.

This brought the company’s valuation to over $9.25bn (£7.3bn).

Analysts believe that investors were mainly supporters of Mr Trump in anticipation of the upcoming presidential election, rather than institutional investors, with the stock being the most popular on US exchanges.

The shares were traded under the ticker symbol DJT – Mr. Trump’s initials – giving it a personal touch as he deals with a series of significant legal costs from four criminal trials and struggles to raise funds for his reelection campaign.

The company’s stock market listing was made possible through a merger with a publicly traded shell company called Digital World Acquisition Corp.

The two-year deal was finalized earlier this week after receiving regulatory approval, allowing the company to become TMTG.

Trump used a special purpose acquisition firm (SPAC) to take TMTG public, bypassing the traditional Initial Public Offering route.

The sale of shares will provide $300m to Truth Social, which claims to have millions of users.

Reports show that the platform generated $3.5m in revenue in the first nine months of 2023, with losses amounting to ten times that sum.

Truth Social was launched in 2022 by Mr Trump after being banned from Facebook and Twitter, now known as X.

In a statement, Trump Media said: “We believe that the start of trading of DJT on the public markets reflects the demand for free-speech platforms that resist the censorship imposed by Big Tech.”

Market analysts were quick to analyze the situation.

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Thomas Hayes, chairman of Great Hill Capital, commented: “The valuation of the business is high compared to its underlying fundamentals, but I wouldn’t bet against it in the short term.

“This valuation may be more reflective of the enthusiasm of Trump supporters than a realistic assessment of the business’s prospects.”

Lock-up rules prevent Mr Trump from accessing his 78.75 million shares in TMTG, constituting a 69% stake, for at least six months.

However, it is possible that the board may grant him a waiver.