Trump’s volatile return to the stock market

This week, Donald Trump has become both a stock meme and a social media entrepreneur, announcing that a new company called Trump Media & Technology Group will merge with an existing publicly traded company.

Why is this important: The medium-term promise from Trump’s media company is that it will replace Twitter for anyone who wants to follow Trump’s posts. The short-term promise is that it can be a trendy new speculative vehicle for people looking to get rich quick on the stock market.

In numbers : Over 625 million shares of Digital World Acquisition Corp. were negotiated Thursday and Friday. That’s 20 times the total number of shares outstanding – a sign that the stock has become an ultra-short-term trading vehicle rather than a long-term type of investment.

The plot: Trump’s latest flirtation with the stock market has already generated monster profits for a small number of insiders.

  • Big purchases PSPC shares and warrants publicizing Trump’s social media company were made public on Wednesday, ahead of the official announcement of the merger.
  • 675,000 shares were purchased at $ 9.96 each, as well as 525,000 warrants at $ 0.52.
  • The total purchase price, Wednesday afternoon, was just under $ 7 million. Friday morning at 10 a.m., those titles were worth $ 106 million and $ 39 million respectively, for a total profit in less than 48 hours of $ 138 million.

Where he is : At the moment, Trump’s company barely exists – it doesn’t even have a CEO.

  • Trump will control the company if and when he will merge with his media startup, which will likely make him the controlling shareholder of a public media company and a presidential candidate at the same time. Anyone who raises the price of the company’s shares will automatically make Trump himself rich.
  • Go back: Trump’s last company to go public, Trump Hotels and Casino Resorts, went into bankruptcy within a decade.

The bottom line: One word is likely to characterize both the Trump campaign and his company’s stock price: Volatile.

About Larry Noble

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