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Shares of Donald J. Trump’s social media company rose on Wednesday after the former president clinched another term in office but not nearly as much as many shareholders might have hoped.
Shares of Trump Media & Technology Group, the parent company of Truth Social, were up 5 percent in morning trading, a day after the company reported third-quarter earnings that showed it continued to struggle to generate revenues.
During his campaign, President-elect Trump used Truth Social as his primary online megaphone for reaching his supporters and attacking his political foes. And he’s likely to continue doing the same once he moves back into the White House.
But so far Truth Social has struggled to gain new subscribers and advertisers. And an election defeat could have been devastating for Trump Media’s stock given the company’s lackluster financials and underlying fundamentals.
In September, Truth Social had 698,000 monthly active users in the United States, compared with 70.4 million for X, according to Similarweb, a data tracking site. X, formerly Twitter, is owned by the tech billionaire Elon Musk, who was one of Mr. Trump’s biggest supporters during the campaign.
Some shareholders — many of them individual investors and supporters of Mr. Trump — took to a Truth Social message board on Wednesday to blast Wall Street traders, accusing it of conspiring to keep a lid on the stock price. One poster wrote: “I don’t see how we aren’t up more, this is crazy.” And another said: “All stocks soaring from Trump win except his stock.”
On Truth Social, investors in the stock have often complained about bearish investors known as short sellers, who try to profit by driving down the price of the stock.
Before the trading day began, it appeared Trump Media shares were poised to rocket higher.
The stock was the most heavily traded in the hours before the official market open and rose as much as 30 percent in early trading. Swings in Trump Media’s price set off brief trading halts by stock exchanges on Wednesday morning, as they have on other occasions. The pauses are meant to give investors a chance to catch up to the movements.
Its share price has more than doubled from its low point in September, but at around $36 a share as of Wednesday morning, it remains well below its high of $66.22, which it reached shortly after its Wall Street debut in March.
Mr. Trump owns a 57 percent stake in Trump Media, worth more than $5 billion, making the stock one of the president-elect’s most valuable assets. Before the election Mr. Trump said he had no intention of selling any of his 115 million shares but he may be forced to sell some to comply with federal ethics rules.
Though Mr. Trump is not an officer or director of Trump Media, its board is dominated by people with close ties to him, like his eldest son, Donald Trump Jr., And a few others may be considered for positions in his administration.
Before the election, the stock had traded largely as a proxy for Mr. Trump’s political fortunes, untethered to the company’s business performance. On Election Day, the company released its latest quarterly earnings, showing that it continues to struggle as a business.
Last quarter, Trump Media took in about $1 million in revenue, somewhat less than the year-earlier period, and reported a loss of more than $19 million, the company said on Tuesday.
Almost all of Trump Media’s revenue comes from advertising on Truth Social — ads that tend to be related to products associated with Mr. Trump’s name and image. This summer, Trump Media introduced a streaming media service on Truth Social.
In a news release announcing the latest earnings, the company pointed out the “unique profile” of its 650,000 shareholders, almost all individual investors holding relatively small stakes.
The company said only about 2,100 of its investors own more than 5,000 shares — an indication that Trump Media is very much a retail stock that is not held only by institutional investors and hedge funds.
The post Truth Social Stock Moves Higher on Trump Election Victory appeared first on New York Times.
