DJT: Trump's social media stocks rise after his victory, making him a billion dollars richer

new York
CNN
—

Donald Trump didn't just win the White House. He also became more than a billion dollars richer on Wednesday.

Trump Media & Technology Group, owner of Truth Social, Trump's social media company, is surging this morning after CNN and other media outlets predicted Trump won the election.

Trump Media's stock, which trades under the ticker symbol “DJT,” rose 35% in premarket trading, giving it a staggering market value of around $9 billion.

Trump is the main shareholder in the conservative social media company, which generates little revenue and loses money.

The president-elect's 114.75 million shares are worth about $5.3 billion based on premarket trading, compared with $3.9 billion when trading ended on Election Day. Of course, these are just paper profits, and in practice it would be difficult for Trump to sell much of these shares without driving up the price.

For months, Trump Media has served as a proxy for how traders envision the election ending.

As Trump's election chances fell, the company's stock price plunged to record low after record low in September.

But between September 23 and the end of October, Trump Media's value more than tripled – a stunning increase driven by bets that Trump would win the White House.

Matthew Tuttle, CEO of Tuttle Capital Management, told CNN he wasn't surprised by Trump Media's rise on Wednesday, saying the stock was the “only pure play” for traders to bet on on a Trump victory.

Tuttle added that there is also likely a “massive short squeeze” caused by ill-timed short bets against the stock's value in recent days. When a stock's price begins to rise sharply, traders who bet against it are forced to buy back the stock to limit their losses. And that in turn causes the price to rise even further.

“A lot of people were fooled by the Iowa poll,” Tuttle said, pointing to a poll last weekend that showed Trump no longer leading in a state he won twice.

Still, it's difficult to understand Trump Media's price tag. At around $9.5 billion, it is now more than twice as high as Macy's and four times as expensive as JetBlue.

This is despite the fact that Trump Media has very little revenue and Truth Social is a relatively small player in the social media space.

“The magnitude of his victory helps, but longer-term they need to come up with a strategy,” Tuttle said.

Trump Media said Tuesday afternoon that third-quarter revenue fell 5% to just $1 million.

“Fundamentals don’t matter,” said Michael Block, chief operating officer and co-founder of AgentSmyth, an autonomous AI agent platform for investment ideas.

Block argued the market value reflected the value of a media company branded by “someone who is emerging as perhaps the most consequential person of the 21.”^st Century.”

“Forget the last 40 years and the series of bankruptcies. Think about the here and now and what the brand is worth,” Block said.