Shares of stock in Trump Media & Technology Group, the parent company of Donald Trump’s Truth Social, are back to trading at $53 despite no evidence that the technology company will ever be profitable, according to a report from the New York Times.
That, in turn, has some financial analysts scratching their, heads with one principal in a company specializing in financial advice saying the company is worthless and an investor admitting he’s uncomfortable with how much money he has tied up in the stock.
As The Times’ Matthew Goldstein reported, the stock — often derided as a “meme stock” — has almost returned to the $58 it was valued at the end of the first day of trading, putting Trump’s majority holdings at $6 billion — although he still can touch the money for months.
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With Goldstein pointing out the company lost $58 million last year, Mike Stegemoller, a finance professor at Baylor University, said, “A meme stock has no economic rationale. It is like someone acting erratically on the street — just get out the way.”
One investor, attorney Michael Melkersen, who purchased Digital World stock before the initial public offering in 2021 and claimed he is sitting on “hundreds of thousands of shares of Trump Media,” asserted it has paid off for him but, out of an abundance of caution, he is looking to sell some of it off.
“I believed in it but I am too heavily invested for my own comfort,” he said.
Justin Yochum, a co-owner of Selway, an Idaho-based investment advisory firm, explained that his firm purchased Trump Media & Technology Group warrants, which provide his investor clients “the right to new stock at a fixed price as long as regulators approve the new shares,” but was skeptical.
“I believe the company itself is worth zero,” Yochum admitted.
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Source: ‘The company itself is worth zero’: Truth Social stock shoots up despite broker doubts
