Trump Media shares surge in market debut
Shares were briefly halted due to volatility
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Shares of former President Donald Trump's social media company surged on Tuesday during its first day of trading on the Nasdaq.
Trump Media & Technology Group's stock climbed over 50% at the opening bell, before being halted briefly due to volatility, ending the session with a 16% gain.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DJT | TRUMP MEDIA & TECHNOLOGY GROUP CORP | 41.54 | +3.05 | +7.92% |
The company is the parent of the social media app Truth Social.
Trump Media & Technology Group went public through a merger with the use of a special purpose acquisition company, Digital World Acquisition Corp. (DWAC), which approved the merger last week. The company's market value is now at about $8 billion.
Trump Media & Technology Group Corp.
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Trump Media stock soared in its stock market debut. (Photo by Sean Rayford/Getty Images / Getty Images)
Trump owns nearly 80 million shares in the company, giving him ownership of about 58% of the new legal entity. That stake – which was initially valued at about $3.3 billion – rose closer to $4 billion ahead of its stock market debut. That value climbed on Tuesday.
While those assets could provide the former president with a cash infusion as he deals with expensive legal battles in civil and criminal court, Trump may be unable to access those funds for a period of time due to restrictions on the stock following its initial public offering (IPO).
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Former President Donald Trump secured a win in appeals court that reduced the required bond for his civil fraud judgment appeal to $175 million from $454 million. (James Devaney/GC Images / Getty Images)
Leading shareholders in IPOs are often subject to restrictions that require them to hold their shares for at least six months as a means of protecting those who purchased the stock post-IPO from unanticipated volatility caused by a large quantity of shares being sold unexpectedly. Such restrictions also apply to other arrangements like taking out a loan against the value of the stock.
The company's board could waive those restrictions to allow Trump to sell his shares earlier than six months. However, the need for such an arrangement may have been negated by Monday's ruling by a New York appeals court in Trump's civil fraud case that reduced his required bond from the full $454 million judgment against him to $175 million while he appeals the underlying ruling.
Social media app Truth Social is a subsidiary of Trump Media & Technology Group. (Photo by Anna Barclay/Getty Images / Getty Images)
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The former president said that he'll be able to cover that smaller amount using "either a bond, equivalent securities, or cash."
This comes after his legal team said they were unable to secure a bond covering the $454 million judgment, which raised the prospect of the state of New York moving to seize his assets.