Shares of Donald Trump's media holding Trump Media & Technology Group (TMTG), which owns the social network Truth Social, rallied sharply ahead of the US presidential election, making the company more expensive than X (formerly Twitter), owned by Elon Musk. After trading on Tuesday, TMTG's market capitalization reached $10.3 billion, surpassing X's valuation of $9.4 billion, according to The Guardian.
TMTG shares jumped 8.8%, prompting a temporary trading halt due to increased volatility. The company has seen rapid growth in recent weeks, tripling its value in October alone. This happened amid an active election campaign by Trump, who is trying to win the support of voters. Trump's personal stake in the company is now valued at approximately $5.9 billion.
Although X significantly exceeds Truth Social in terms of users - for example, in September X was visited by 706.2 million people (according to Similarweb), while Truth Social. is only 13.5 million - TMTG investors are not at all embarrassed by this fact. In addition, the market value of Trump's company has already exceeded the capitalization of US broadcaster SiriusXM, which has 33 million subscribers and made $316 million in profit in the second quarter. At the same time, TMTG recorded a loss of $16.4 million during this period.
Experts attribute the rise of TMTG stock to the phenomenon of so-called “meme stocks” (Meme Stocks) when companies suddenly become popular among small investors making quick trades. within one trading day. A similar incident happened with video game retailer GameStop in 2021, whose stock skyrocketed overnight. However, sharp upswings often give way to equally rapid downswings. For example, TMTG stock, which reached $66 per share in March, fell to $12.15 in September.
However, as the US election approached and the chances of Trump winning again increased, stocks started to recover again. Thus, since September, the market capitalization of TMTG has quadrupled, which shows the high confidence of investors in the short-term success of the company.