The value of former President Donald Trump's social media company, Trump Media & Technology Group, skyrocketed Monday after an attempted assassination over the weekend. Trump Media's share price surged 53% in premarket trading, marking the biggest single-day gain since the company debuted in late March.
At current prices, Trump's 114.75 million shares in Trump Media are worth about $5.6 billion, up from $3.5 billion on Friday, the day before the incident at a rally in Butler, Pennsylvania. Trading under the ticker symbol "DJT," Trump Media has achieved a massive valuation despite generating little revenue and having a relatively small presence in the social media landscape.
Matthew Tuttle, CEO of Tuttle Capital Management, commented on the surge, saying, "You are seeing the Trump trade on steroids here. DJT is the go-to." This spike is believed to reflect increased speculation among traders that Trump's odds of winning the upcoming presidential election have significantly improved.
Trump Media recently announced its addition to the Russell 1000 Index of large-cap stocks and the Russell 3000 Index. This inclusion means countless retail investors now own a piece of Trump Media through mutual funds and exchange-traded funds (ETFs).
The rally in Trump Media shares comes as Trump prepares to formally accept the Republican nomination for president at the convention in Milwaukee this week. The former president's brand and the value of DJT stock are closely intertwined, particularly following the launch of Truth Social after Trump was banned from Twitter, now known as X, following the January 6, 2021, Capitol riot.
The assassination attempt on Trump also led to a surge in endorsements from prominent figures in the business community. Tesla CEO Elon Musk and billionaire investor Bill Ackman were among those who publicly expressed their support. Musk posted on X, "I fully endorse President Trump and hope for his rapid recovery," which contributed to a 4% rise in Tesla stock early Monday.
Despite the positive market response, Trump Media has faced significant financial challenges. The company reported the cash exercise of stock warrants between June 20 and July 1, which brought in more than $105 million. This influx of funds comes as the company has been struggling with cash flow issues. As of July 1, Trump Media had more than $350 million in cash with no debt, according to regulatory filings.
In April, Trump Media filed a "preliminary prospectus" with the U.S. Securities and Exchange Commission (SEC) to offer 21.49 million shares of common stock, issuable "upon the exercise of warrants." This followed another quarterly loss in May, with revenue failing to hit $1 million for the second consecutive quarter. Trump Media reported an adjusted EBITDA loss of $12.1 million, with just over half of that due to one-time payments related to the March closing of its SPAC merger with Digital World Acquisition Corp.
Despite these challenges, Trump Media remains optimistic about its financial health. The company stated it believes it has "sufficient working capital to fund operations for the foreseeable future." DJT/DWAC has gained 77% in 2024, and Trump holds nearly a 65% stake in the company.
