Trump’s Wealth Rises as Truth Social Stock Jumps 20%

Shares of Trump Media & Technology Group, the company behind the Truth Social platform, experienced a remarkable surge on Monday, reflecting growing optimism surrounding former President Donald Trump’s political prospects. The stock price jumped nearly 20%, closing at approximately $47 per share, marking the highest closing price since May 31. This substantial increase translates to an additional $900 million added to Trump’s net worth, which now stands at around $7.5 billion, largely due to his 57% ownership stake in the company valued at about $5.5 billion.

Over the past month, Trump’s net worth has soared by an impressive $3.8 billion, driven by a staggering increase in Trump Media’s stock price, which has risen more than 200%. This rise reflects a notable shift in the prediction markets regarding Trump’s chances in the upcoming presidential election. According to FiveThirtyEight’s election model, Trump has a 54% probability of defeating Vice President Kamala Harris in the November election, a significant jump from just 42% a month ago and an increase from 51% a week prior. Similarly, Polymarket, a popular betting platform, indicates Trump’s odds of victory at 66%, up from 48% a month ago and 64% just a week ago.

The latest rally in Trump Media’s stock does not seem to stem from any specific developments within the company’s business operations. Instead, it appears to be more closely linked to the changing political landscape and the shifting perceptions of Trump’s viability as a candidate. Trump Media has been trading under the ticker symbol $DJT, a nod to the former president’s initials, since its debut as an independent entity in March, following a lengthy 2.5-year reverse merger process with Digital World Acquisition Corp., a special purpose acquisition company (SPAC).

Despite the impressive stock performance, analysts and pundits caution that investing in Trump Media may reflect more of a personal endorsement of Trump rather than a belief in the company’s fundamental business strength. The financial figures reported by Trump Media raise eyebrows when compared to those of other major social media firms. For instance, in the first half of 2024, Trump Media reported revenues of only $1.6 million. In stark contrast, companies like Reddit and Snap reported revenues of $524 million and $2.4 billion, respectively, during the same period. Additionally, while Reddit and Snap boast market valuations of approximately $13 billion and $17 billion, Trump Media’s market cap is currently around $9 billion, illustrating the disparity in financial performance.

As Trump’s political stock rises, the valuation of Trump Media is becoming increasingly intertwined with his personal brand. Some experts argue that investors in Trump Media may be making a calculated bet on Trump’s political future rather than on the company’s actual financial health. This trend is indicative of a broader pattern where public sentiment toward Trump significantly influences market perceptions of his business endeavors.

While Trump has indicated no immediate plans to sell shares of Trump Media, his eligibility to do so became a topic of discussion last month, raising questions about the potential implications for the company’s stock price. As Trump navigates his political ambitions, the performance of Trump Media will likely remain closely monitored by both investors and political observers alike.

In summary, the remarkable 20% jump in Trump Media’s stock on Monday underscores a significant shift in the market’s confidence in Trump’s political prospects. With his net worth rising by $3.8 billion in just one month, fueled by the soaring share price of his media company, the interplay between politics and business is becoming increasingly apparent. As the election approaches, the dynamics surrounding Trump Media may evolve further, reflecting the changing tides of public sentiment and electoral prediction. Investors will undoubtedly be keeping a close eye on both the stock performance of Trump Media and the unfolding political landscape as they make their decisions in this unique and volatile market.