In a controversial and polarizing move, Truth Social – the social media platform founded by former President Donald Trump – went public this week in a blockbuster debut on the Nasdaq stock exchange. The newly minted public company’s shares skyrocketed, pushing its market valuation to a staggering $8 billion by the closing bell.
The platform’s parent company, Trump Media & Technology Group, merged with a special purpose acquisition company (SPAC) called Digital World Acquisition Corp to facilitate the public listing. SPACs raise money through an initial public offering to eventually acquire or merge with a private firm, providing a shortcut to the public markets.
Right out of the gate, trading of the company’s shares under the apropos ticker symbol “DJT” was so frenzied that Nasdaq officials had to temporarily halt transactions to allow the price to stabilize. At one point during the volatile first day, Truth Social’s stock soared as high as 50% above its opening price.
The tremendous investor demand reflects both the keen interest and deep divisiveness around the Trump brand name. The former president still commands fervent support from his political base, while being a hugely polarizing figure reviled by critics.
For Trump himself, the lucrative debut marks a crucial financial win at a pivotal moment. The former president’s net worth surged with the stock pop, propelling him into the rarefied ranks of the world’s 500 richest people for the first time with an estimated $4.6 billion fortune, according to Bloomberg’s calculations.
“I LOVE TRUTH SOCIAL,” Trump proclaimed in characteristically caps-locked exuberance on his prized social platform as shares spiked.
However, the 45th president cannot immediately cash in on his monstrous new stake due to legal constraints around the merger that forbid him from selling shares for now. But that could change in time, potentially transforming Trump into a multi-billionaire tycoon if the company’s scorching valuation can be sustained.
The spectacular stock market debut represents a stunning turnaround for Truth Social, which had faced widespread mockery and doubt over its ability to gain traction and scale into a viable business. Since its launch in early 2022 after being booted from mainstream platforms like Twitter, the self-proclaimed “free speech” app had struggled with technological glitches, staffing issues, and paltry user numbers.
In its first two years of operation, Truth Social had generated a meager $5 million in revenues against the hundreds of millions invested by Trump’s team of affluent backers from sectors like hedge funds and real estate. The sputtering start had many dismissing Truth Social as just another quixotic vanity project doomed to fail.
But the site’s ability to rapidly monetize its fervent user base of mostly pro-Trump conservatives appears to have finally gained credibility with investors. While nowhere near the size of industry leaders like Twitter, Truth Social’s highly engaged audience has proven to be a potent revenue generator through premium subscriptions, digital media, and e-commerce sales.
“As a public company, we will passionately pursue our vision to reclaim the internet from big tech censors,” vowed Devin Nunes, the former Republican congressman who now serves as Truth Social’s CEO, in a statement celebrating the IPO.
At the core of Truth Social’s slogan of “free speech” is unfettered dialog without the content moderation policies employed by mainstream platforms that fact-check misinformation and prohibit hate speech, harassment, and incitements to violence. This permissive stance has attracted a highly engaged user base, but also made the platform a magnet for toxic misinformation, conspiracy theories, and extremism according to watchdog groups.
Just as Truth Social was ringing this week’s opening bell on Wall Street, Trump himself was bracing for a potential criminal indictment in New York over hush money payments made during his 2016 presidential campaign. The possible charges dramatize the turmoil still swirling around the former president even as his media venture wins a huge financial windfall.
While the company’s sky-high $8 billion valuation remains to be justified, Truth Social has undoubtedly arrived as a player in the turbulent world of tech startups and free speech platforms. Its success or failure moving forward will likely hinge on the same polarized dynamic that has defined Donald Trump’s entire business career and political life – passionate supporters and vitriolic critics watching every move.
