Donald Trump’s financial luck seems to be holding out as his social-media company, Trump Media & Technology Group, completed a merger with Digital World Acquisition, taking the company public and seeing its stock value soar to nearly $8.4 billion. However, experts warn that the company’s actual value doesn’t align with its market capitalization, making it a classic bubble stock.
Despite generating only $3.4 million in revenue and incurring net losses of $49 million in the previous year, Trump Media’s stock price continues to rise, driven by small investors, some of whom are Trump supporters. The company’s main asset, Truth Social, has failed to gain significant traction, with only 1.5 million monthly visitors compared to other social-media giants like X and Threads.
The current market environment, characterized by soaring tech stocks and risky assets, has contributed to the inflated valuation of Trump Media. However, history has shown that bubbles eventually burst, as seen with meme stocks like GameStop and AMC Entertainment.
As Trump contemplates his next move, experts advise him to cash out quickly before the bubble bursts. With potential restrictions on selling stock due to lock-up provisions and the need to navigate complex financial maneuvers, Trump faces a delicate balancing act to secure his financial gains.
In the high-stakes world of finance, where luck can only take you so far, Trump must tread carefully to avoid a costly misstep that could jeopardize his newfound wealth. As the market dynamics continue to evolve, only time will tell if Trump’s luck will hold out or if reality will catch up with his inflated stock valuation.
