Trump's Latest Venture: Trump Media & Technology Group Goes Public with DJT Ticker
Trump Media & Technology Group makes its Nasdaq debut on Tuesday with the stock ticker DJT, marking Trump's latest foray into the business world.
A new company, Trump Media & Technology Group, is now listed on the Nasdaq as of Tuesday. It will be trading under the stock ticker DJT.
The company is named after Donald John Trump, emphasizing its purpose of providing a platform (and significant financial support) for the expected Republican nominee. Their flagship product, Truth Social, was created by Trump as a response to being banned from most mainstream social media platforms following the events of January 6, 2021, at the US Capitol.
The social media app was never a blockbuster, though, and it’s unclear how the company will ever make money.
If that all sounds familiar, that’s because we’ve been down this road before.
Trump Media is a new company, but its stock ticker is reminiscent of Trump's previous publicly traded company. Trump used the same initials for his Atlantic City casino business, Trump Hotels and Casino Resorts, when it went public in 1995.
Unfortunately, the outcome was not favorable for investors.
Trump Hotels and Casino Resorts went bankrupt in 2004, leaving shareholders with nothing.
Despite owning top Atlantic City casinos like the Trump Taj Mahal, Trump's company lost over $600 million and never made a profit. Trump even referred to the Taj Mahal as "the eighth wonder of the world."
Former US President Donald Trump was seen at Manhattan Criminal Court in New York City on March 25, 2024, for a hearing to set the date of his trial. The trial is regarding accusations of covering up hush money payments related to extramarital affairs.
Former US President Donald Trump attends a hearing to determine the date of his trial for allegedly covering up hush money payments linked to extramarital affairs, at Manhattan Criminal Court in New York City on March 25, 2024.
Justin Lane/Pool/AFP via Getty Images
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The stock lost 90% its value in its first five years as a public company.
Trump did well financially during his time as CEO of the company. From 1995 to 2004, he received around $40 million in salary, bonuses, and options, which is typical for a CEO. In addition to this, Trump also earned money through less common methods such as consulting contracts, licensing deals, and reimbursements for the use of his personal jet and golf courses. These unconventional payments made up about half of his earnings during his leadership.
In 2016, Trump mentioned to the New York Times, "The money I took out of there was incredible."
Trump lost all his stock holdings in the bankruptcy, but he still managed to earn millions from the company once it emerged from bankruptcy. He pocketed $6.1 million from the rebranded Trump Entertainment Resorts company, now trading under the new ticker symbol TRMP.
Despite the new name and ticker symbol, the company did not improve its financial situation. It suffered losses of $2 billion over a span of five years and eventually filed for bankruptcy again in 2009.
The new DJT is currently experiencing market excitement after the merger between Trump's media company and Digital World Acquisition Corp. Shares of DWAC jumped 40% on Monday and have increased by over 170% in the last six months.
However, when we examine the basics, it becomes evident that the stock is significantly overvalued. According to SEC filings, Trump Media only generated $3.4 million in revenue during the first nine months of last year.
A phone screen displays the Truth Social app in Washington, DC, on February 21, 2022.
A phone screen displays the Truth Social app in Washington, DC, on February 21, 2022.
Stefani Reynolds/AFP/Getty Images
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Trump Media, the owner of Truth Social, will start trading on Tuesday following the completion of the merger. According to Yale law professor Jonathan Macey, the stock price appears to be inflated. He mentioned that it is not advisable for rational investors to accept the stock at its current value, especially if they plan to hold onto it for an extended period.
Truth Social, the social media platform created by Donald Trump, is seeing a decrease in its user base compared to X, the company previously known as Twitter.
Currently, Trump's ownership in Truth Social is estimated to be worth around $4 billion. While he may not be able to sell his stock for a few months after trading starts, there could be ways around this restriction if approved by the company's board of directors.
The board may be more willing to approve the plan now that Trump's civil fraud bond obligation has decreased by over 60%. With the reduced payment of $175 million instead of $454 million, Trump would only need to sell a smaller portion of his stake in Trump Media to make up the difference.
CNN's Matt Egan provided additional information for this report.
Editor's P/S:
The article highlights the financial history of Donald Trump's business ventures, focusing on the parallels between his previous publicly traded company, Trump Hotels and Casino Resorts, and his current venture, Trump Media & Technology Group. Both companies have utilized similar stock tickers, DJT and TRMP, but have ultimately faced bankruptcy and financial struggles. The article raises concerns about the overvaluation of Trump Media's stock and the potential for investors to face significant losses.
The article also mentions the decrease in user base for Truth Social, Trump's social media platform, compared to Twitter. It explores the possibility of Trump selling a portion of his stake in Trump Media to meet his reduced civil fraud bond obligation. The article serves as a cautionary tale for investors considering investing in Trump Media, given the historical financial failures associated with Trump's previous business ventures and the uncertain financial prospects of his current company.
