What to Know About Trump Media’s Stock Debut

On its first day on the Nasdaq stock exchange on Tuesday, Trump Media & Technology Group became such a high-flying stock that trading in its shares, under the ticker DJT, had to be briefly halted because of extreme volatility.

The huge public debut for the company is especially important for its biggest shareholder, former President Donald J. Trump, whose 60 percent stake is now worth about $4.6 billion on paper.

Here’s what you need to know.

Wait, Trump Media is worth how much?

After Tuesday’s trading, Trump Media had a market value of nearly $8 billion. That makes it larger than corporations like Mattel, Alaska Airlines and Western Union.

It made only $3 million over most of last year. How can it be worth billions now?

Trump Media’s valuation is disproportionately high compared with other social media companies. The company took in $3.3 million in the first nine months of 2023 and recorded a loss of $49 million, yet its market value — based on Tuesday’s share price — is nearly 2,000 times its estimated annual revenue.

Trump Media’s main asset is Truth Social, the digital platform that Mr. Trump describes as an alternative to Twitter and that he uses for reaching supporters and attacking critics.

Investors sometimes justify lofty valuations given to small companies operating at a loss because of anticipated growth or the expectation that other investors will continue to bid up shares. Still, other social media companies trade at far lower price-to-sales ratios than Trump Media’s: Reddit is around 10, Meta is 7 and Snap is 6, according to FactSet. Superstar tech stocks like the chipmakers Nvidia and ARM trade at price-to-sales ratios of about 25.