The stock market phenomenon and the Bible salesman

Trump’s greatest asset is his personal brand, which goes beyond immense popularity in much of America: there are millions of people who have blind faith in him. Many people would buy the magical remedy for hair growth or against osteoarthritis if the former president put them on sale.

However, Trump has done something even more fascinating: He made public Truth Social, the social network he founded in response to the suspension of his accounts by platforms like Twitter, Facebook, and Instagram following the attack on the Capitol in January 2021. created. By the crowd of his followers.

Truth Social’s numbers are negligible. It incurred a loss of 49 million in the first months of 2023. This is normal at the beginning of any company, especially in the technology sector. But their earnings say much more than that: barely a million dollars per quarter last year. Or its visitors, about five million last February. These are ridiculous numbers compared to its competitors, like Instagram’s 2 billion visitors or the $135 billion in revenue last year from the company that controls it, Meta.

army of followers

All this doesn’t matter. Because, somehow, Trump, who controls 60% of the company, has made himself public. Truth Social is simply a representation of their public image, the entire social network is built around the content they share there. The company’s stock symbol is its initials, DJT. And a huge number of his followers are flocking to get a share of the New York billionaire.

Trump Media & Technology Group went public on the Nasdaq on Tuesday, and the stock soared. It increased by 60% during the first day of trading. It closed in the green with an impressive gain of 16% and the fever continued with similar gains into the next day. The buttons on Trump’s shirt should have burst this Thursday: with almost 9,000 million dollars, the capitalization of his company exceeds that of ‘The New York Times’, a symbol of the progressive press with which he has dealt with since coming to office. Have struggled. Politics in 2015.

Truth Social’s stock market rally this week confirms that it has become known as a ‘meme stock’ in that its capitalization and investor appetite bear no relation to the company’s actual finances. This is a phenomenon that mesmerized the markets a few years ago, for example, with the takeoff of values ​​like GameStop, in that case, due to the concerted effort of thousands of individual investors.

The case of Truth Social is extreme. Social Networks reddit, Which recently went public and was very strongly appreciated, its capitalization is ten times higher than its annual income. In the case of Nvidia, which was last year’s great stock market phenomenon, it is 25 times more. Truth Social is two thousand times bigger.

This is a special ‘meme action’ of Trump’s company. Mixed into this are speculators who have calculated that many people will invest and become staunch Trump followers, for whom the purchase is a political statement. The former must choose when is a good time to collect profits. At the time of going to press, Trump’s stock was falling more than 6%, indicating volatility and risks. It is the latter, loyal to the former President, who may have to bear the brunt.

Like all ‘meme’ values, “at some point it will come back down to earth,” defended Seven’s Report Research analyst Tom Essaye on ABC News. “Financial reality always wins.” When? “It’s very hard to know.”

his wealth doubled

An important question is what will Trump do with the new property that has more than doubled his wealth. Because the former president, whose wealth has so far been based on bricks, needs liquids – as he made clear in the bail deposits, but also to spend it on his campaign – and maybe he wants shares. Want to invest capital before market boom? The champagne is out. Bubbles.

There are many problems in this. Trump cannot sell any of his shares for a period of six months unless he gets approval from his company’s board. It wouldn’t be difficult – people he trusts sit there, starting with his son – but if he did it would send a message to the market that would send the stock price sinking and anger his voters. The plan should be to touch nothing until at least the November election and hope that the stock’s value will remain intact should he become President. Or that, if it sinks, at least it will hold him now in the White House.

Bible, your favorite book

Meanwhile, Trump is taking advantage of his figure to continue gaining access to liquids. This week he started selling Bibles. “Every American should have a Bible in their home, I have quite a few,” says Trump, a newlywed flirt from New York who had no religious fervor until his candidacy for the presidency. “This is my favorite book.”

The sale of the Bible for $60 per sacred text, part of a licensing agreement for his name, is the way Trump has made money throughout his life. First, with casinos, hotels or universities. Now, also from golden sneakers – They introduced them this year, they cost $400 – including the photo book and even the steak.

But unlike a Bible or a piece of meat, the stock can drop to zero. Even if Trump doesn’t sell until the price drops 90%, the former president will come out of it with $500 million in his pocket. The problem will be for those small investors who have trusted him.