Trump Media & Technology Group, the owner of struggling social media platform Truth Social, is began its long-delayed journey as a public company at Tuesday’s opening bell under the ticker symbol “DJT.”
The stock surged about 56% at the open, to $78, and trading was briefly halted for volatility. Trump Media shares have since stabilized at around $70, marking a 40% increase from Monday’s close.
Wall Street is assigning Trump Media an eye-popping valuation of around $13 billion — a price tag that experts warn is untethered to reality.
The skyrocketing share price comes despite the fact that Trump Media is burning through cash; piling up losses; and its main product, Truth Social, is losing users.
“This is a very unusual situation. The stock is pretty much divorced from fundamentals,” said Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, who has been studying initial public offerings (IPOs) for over 40 years.
Being untethered to reality is literally in the core of stock trading. It’s nonsense, modern day magick for the least cool people.
Value Investors might argue otherwise. I’ve got more than a few shares in stock with a sub-20 P/E ratio. They do exist and you can make money holding them.
They just don’t have the rocket ship like growth of your Magnificent Seven or your even more speculative stocks.