Why Trump Media Doesn’t Trade Like Other Social-Media Companies
- Trump Media & Technology Group stock outperforms rest of social-media sector
- Trump Media shares down 1.0% in premarket trading
- Rest of social-media sector affected by Meta Platforms’ earnings report
- Trump Media’s stock performance divorced from financials and wider market
- Investors buying Trump Media shares as show of support for Trump or for speculation
- Trump’s shares valued at around $4.1 billion
- Former president barred from selling shares until September
Trump Media & Technology Group stock was edging down on Thursday but outperforming the rest of the social-media sector. Trump Media shares were down 1.0% at $35.30 in premarket trading. The stock closed up 9.5% on Wednesday. The rest of the social-media sector was rocked by Meta Platforms’ earnings report on Wednesday, after its guidance fell slightly short of expectations. Meta was falling 13% in premarket trading and peers Snap and Pinterest dropped 4.8% and 3.8% respectively. In contrast, Trump Media looked relatively unaffected. That’s likely because Trump Media’s stock performance is largely divorced from its financials and the wider state of the social-media market. Trump Media’s revenue in 2023 was $4.1 million, and the company posted a net loss of $58.2 million, meaning the stock is hugely overvalued on most normal metrics. Its Truth Social platform is a niche player in social media, although it has announced plans to launch a streaming service. Instead, the stock seems to be driven by investors buying the shares as a show of support for former U.S. President Donald Trump as he seeks a second term as president this fall, or those looking to speculate on its volatile moves. Trump’s nearly 115 million shares in the company were valued at around $4.1 billion at Wednesday’s closing price. That figure includes 36 million earnout shares Trump was set to receive after the stock fulfilled the requirements of the award this week. The former president is barred from selling Trump Media shares until a six-month lockup period expires in September, although he could seek a waiver from the company’s board, which includes one of his sons and several former members of his administration.
Factuality Level: 2
Factuality Justification: The article provides information about the stock performance of Trump Media & Technology Group and its comparison with other social media companies. However, it lacks depth and context, and it contains biased language towards former President Donald Trump. The article focuses more on speculation and opinions rather than providing a balanced and objective view of the situation.
Noise Level: 2
Noise Justification: The article provides relevant information about Trump Media & Technology Group’s stock performance and its relation to the wider social-media sector. It also highlights the disconnect between the stock performance and the company’s financials, shedding light on the reasons behind the stock’s valuation. The article stays on topic and supports its claims with data and examples, making it relatively low in noise.
Financial Relevance: Yes
Financial Markets Impacted: The article provides information about the stock performance of Trump Media & Technology Group and its comparison to the rest of the social-media sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the stock performance of Trump Media & Technology Group and its relation to the wider social-media market. There is no mention of any extreme events or their impact.
Public Companies: Meta Platforms (Unknown), Snap (Unknown), Pinterest (Unknown)
Private Companies: Trump Media & Technology Group
Key People: Donald Trump (Former U.S. President, Majority Owner of Trump Media & Technology Group)
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