The social media platform Truth Social, created by former U.S. President Donald Trump, is surging on the U.S. stock market. However, according to Yahoo Finance’s U.S. financial portal, it is just another meme stock.
Truth Social reportedly performed poorly in its management, earning only $3.4 million while suffering a loss of $49 million in the first nine months of last year.
Despite this, Trump supporters are flocking to this stock, rallying it daily.
On the 26th (local time), Truth Social recorded $57.99, a 16.10% surge from the previous New York Stock Exchange trading day. At one point, Truth Social even surged nearly 60% during the day.
This day marked the first trading day under the ticker DJT, named after Trump. It was essentially the first day of DJT’s listing.
Despite the company’s poor performance, the surge in its stock price is reminiscent of GameStop, the original meme stock.
At the beginning of 2021, in the era of low interest rates, retail investors started buying stocks of small, unknown companies like GameStop, which caused their prices to skyrocket and began the trend of meme stocks in the U.S.
Trump’s Truth Social has quickly risen to become a leading meme stock in the U.S., surpassing GameStop.
With the company’s stock price surging over 16% that day, its market capitalization also soared to $8 billion. As Trump owns 60% of the company’s shares, he made roughly $5 billion.
However, many experts predict that the company’s stock price will soon plummet.
Ihor Dusaniwsky, managing director of S3 Partners, said, “The stock price is currently surging due to fervent Trump supporters, but once the bubble bursts, the price will crash. This is because there is a significant disparity between the company’s performance and stock price.”
GameStop’s stock price soared to $81 in January 2021, now trading at $15.
Meanwhile, Trump established Truth Social after being kicked out of major social media platforms like Facebook and Twitter following the Capitol riot on January 6th, 2021.