[Live: The inauguration of President Donald Trump]
Donald Trump's social-media platform, Truth Social, sprung to life as a business venture of the former president and made him a fortune worth nearly $5 billion, on paper. For investors who have tagged along, it has been a wild ride, and it's likely to continue now that Trump is heading back to the White House as the 47th president.
The company, Trump Media & Technology Group, known by its ticker DJT, is largely a cipher with scant disclosures, hardly any revenue, and no coverage on Wall Street. The stock has meme-like qualities, trading on presidential utterances and spikes in volume that vanish as quickly as they arise.
While it has a CEO, Devin Nunes, the company is widely viewed as Trump's fiefdom, given his 52.9% ownership interest and personal influence. Though he has put the shares in a trust controlled by his son Don Jr., it's anyone's guess what's next for the company and how it will go about business with Trump in the Oval Office.
What may happen next? Here are five key questions and answers.
Is There Any Fundamental Support for the Stock?
DJT is a momentum stock on steroids, influenced by the popularity and clout of Trump. Shares popped in late October as his election odds rose, sold off just after the election and have climbed since late November, recently trading at about $40.
The share price and market cap have no connection to the business based on metrics like revenue and earnings. DJT has a market valuation of just under $9 billion and booked revenue of just $1 million in the third quarter. The company has not reported a profit. Comparing it to rivals is pointless; Snap is worth nearly $20 billion on a revenue base estimated at $6 billion this year. Reddit is worth $30 billion on $1.7 billion in estimated revenue.
Wall Street is silent too. No brokerages cover the stock, according to FactSet, so investors can't look at consensus estimates to judge its fundamentals or valuation.
The company is taking some steps to build revenue, investing more in its Truth+ streaming app, for instance. It has launched a proprietary content delivery network and hinted it may make acquisitions of fintech companies.
Would Anyone Come In and Buy DJT?
It's possible. The entire value of the company is in the "goodwill" associated with Trump's brand and support. Without him, DJT may not be worth much of anything. Meta Platforms and Alphabet certainly have the means to snap it up, though DJT's lack of revenue would be a roadblock. Trump has also fumed about the power of large social media companies, saying he was creating Trump Media as "a major new company that will challenge the dominance of the Big Tech giants and Big Media bosses."
The other wild card, of course, is Elon Musk, who could also easily afford a buyout and could integrate DJT into X. That is also unlikely, though, since Trump is once again posting on X, making it unclear what Musk would gain from Trump Media assets.
There have been reports that Trump Media might look to invest in cryptocurrency companies. A report in mid-November indicated that Trump Media could buy crypto trading platform Bakkt. Bakkt said at the time that it doesn't comment on market rumors or speculation.
Trump Media didn't respond to requests for comment.
Will Trump Buy More Stock or Sell His Stake?
Both are unlikely. His 114.75 million shares, worth about $4.6 billion, have been put in a revocable trust. Don Jr. is the trustee and has sole voting power and control of the president's shares.
Trump has maintained several times in social media posts that he doesn't plan to sell the stock. Assuming they are disclosed, sales by Trump's son would likely be closely scrutinized. Significant sales could also lead to a big decline in the share price that would damage the president's net worth, currently estimated at about $7 billion according to Forbes and Bloomberg.
Trump, Jr. could buy more stock, but since his father already controls a majority stake in the firm, it isn't clear why the president would want or need a bigger stake.
How Do Government Ethics Rules Impact DJT?
This is a gray area. According to guidelines from the Office of Government Ethics, presidents and vice presidents "are not legally subject to the restrictions" of conflict of interest laws, though they "should conduct themselves as if they were so bound."
In theory, the president should not have any say in DJT with his son or executives at the firms. But it would be difficult to prove that the president did or didn't discuss the company in private with his family and other associates.
"The trust is a gesture toward cleaning things up. But the concerns are that [Trump] still owns the shares and everybody else knows he owns it," says Jordan Libowitz, vice president of communications for Citizens for Responsibility and Ethics in Washington, a watchdog group.
One concern, according to Libowitz, is foreign influence. While foreign citizens are prohibited from donating to U.S. election campaigns -- and certainly can't donate once a politician is in office -- there is nothing stopping a foreign national from buying shares in DJT and attempting to curry favor with the president.
"If a billionaire or foreign wealth fund put money in it, they'd have a ton of leverage. There are potential ethics issues we haven't thought of yet," Libowitz said.
Who Really Owns DJT Stock Aside From Trump?
The ownership base appears to be largely retail investors. While some big firms, such as Vanguard and BlackRock, have small stakes in DJT, it is primarily because the stock is a holding in index funds. (Trump Media was added to the Russell 1000 and Russell 3000 last year.)
More details about its ownership may come in mid-February when mutual fund firms and hedge funds will file quarterly holdings for the fourth quarter. While big institutions report all their holdings in quarterly 13-F filings, they are not required to file a separate report for a stock unless they own at least 5%. The disclosures may reveal who bought the stock in the final few months of 2024.
Brokerages say retail investors largely account for the trading. "It's a meme stock -- all it needs is a modest excuse and some devotees on social media," said Steve Sosnick, chief strategist with Interactive Brokers.
Bret Kenwell, U.S. investment analyst at eToro, says DJT is an active position for the brokerage's clients, similar to GameStop, AMC Entertainment and other meme stocks. "Volume quickly picks up and then falls off," Kenwell says. "Investors opportunistically try to take advantage of momentum."
The stock's trading patterns indicate it will continue to be a referendum on the president. DJT was the tenth-most actively traded stock at the Tastytrade brokerage on Jan. 13, the Monday before the inauguration, with higher volumes than it had been for some time, according to JJ Kinahan, CEO of IG North America, which owns the brokerage.
The next big corporate news from DJT probably won't come until February when Trump Media is expected to report its fourth quarter and full year results. Until then, DJT may continue to go up and down with little rhyme or reason.
