Trump Media & Technology Group has been valued at more than $10 billion after a surge in stock prices driven by optimism over Donald Trump’s presidential campaign. Meanwhile, X Holdings, formerly Twitter, is valued at approximately $9.4 billion. TMTG has reported substantial losses, raising questions about its financial sustainability despite its inflated market valuation.
Trump Media & Technology Group (TMTG), the parent company of Truth Social, has recently reached a valuation exceeding $10 billion, as its shares have surged more than fourfold since late September. In contrast, X Holdings, formerly known as Twitter, is valued at approximately $9.4 billion, according to Fidelity’s latest assessments of its stake in the company. The stock market performance of TMTG is closely linked to Donald Trump’s prospects in the upcoming presidential election rather than its operational profit outlook. Investors have gained optimism regarding Trump’s potential to reclaim the presidency, which has fueled the stock’s upward momentum, resulting in a nearly 9% increase to $51.51 on Tuesday, following a 22% rise the preceding day. The stock’s rapid fluctuations led to multiple trading halts due to sharp price movements, particularly from a low of around $12 just a month prior. Established by Trump after his bans from Twitter and Facebook post the January 6, 2021, Capitol insurrection, TMTG is based in Sarasota, Florida. Trump retains a 57% ownership stake in the company but does not engage in its operational management. Despite its inflated valuation, TMTG has faced significant financial challenges, including a loss of over $16 million in the quarter concluding in June, with revenue totaling only $837,000 as per regulatory disclosures. Upon Elon Musk’s acquisition of Twitter in October 2022, the company’s valuation stood at around $44 billion, with Fidelity assigning a valuation of $19.7 million for its stake. More recently, Fidelity’s Blue Chip Growth Fund reported its stake in X Holdings has diminished to an estimated worth of $4.2 million. TMTG’s newfound valuation now eclipses that of several established firms, including Caesars Entertainment, Match Group, Walgreens Boots Alliance, and Hasbro. In an interesting turn of events, Musk has emerged as a noteworthy supporter for Trump’s re-election campaign, having invested over $70 million to assist Trump’s efforts. Recently, Musk has actively participated in several town halls aimed at endorsing the former president’s bid for re-election.
The valuation of Trump Media & Technology Group has experienced a significant increase, largely driven by speculation surrounding Donald Trump’s chances of returning to the presidency. Financial markets often reflect these sentiments more than the actual revenue performance of TMTG, which has been operating at a loss since inception. Additionally, the competitive landscape is shifting as companies adjust to new market dynamics following significant corporate changes under Elon Musk’s leadership at X Holdings.
In summary, TMTG’s skyrocketing valuation reflects investor enthusiasm for Donald Trump’s 2024 presidential campaign more than its financial health. The firm’s stock performance contrasts with X Holdings’ declining valuation, signifying a broader shift in investor sentiment. Despite substantial losses, many investors appear willing to bet on TMTG’s prospects, paralleling Trump’s rising political fortunes.
Original Source: nypost.com
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