The launch of Truth Social has provided US presidential candidate Donald Trump with a potential financial windfall, but it also carries a high risk of the “Trump shares” crashing. Trump Media & Technology Group (TMTG), the company behind Truth Social, saw its shares surge on the Nasdaq exchange in New York, symbolized by the abbreviation DJT for Donald John Trump. Despite a lack of profits and modest sales, TMTG’s market value skyrocketed to nearly $9 billion.
The primary purpose of TMTG seems to be a means for Trump’s supporters to back him both financially and speculatively in the stock market. While the stock price surge has been driven by admiration for Trump, the risk of a sharp decline remains significant. Trading in options has reached record levels, with many investors betting on further price increases. However, the volatile nature of meme stocks like TMTG makes them unpredictable and risky investments, akin to cryptocurrencies.
Trump’s urgent need for funds, both for his election campaign and to address legal challenges, adds another layer of complexity to the situation. The lock-up period restricting the sale of Trump’s shares will further complicate his ability to access the funds. The cautious approach of the TMTG board, despite its ties to Trump, suggests that any sale of shares could have negative consequences for the company’s future.
As the situation unfolds, Trump’s financial and legal challenges, as well as the speculative nature of the “Trump shares,” will continue to impact both the stock market and the future of Truth Social. It remains to be seen whether the initial excitement around
