DJT: Will common cause trump common stock?
IN THE Wild West of Trumpland, 2024 has featured enough close-ups of eyes and holsters to satisfy Sergio Leone, with Donald Trump in multiple stand-offs against legal and money woes. Fittingly, Trump’s media firm has also been quite the bucking bronco since its market debut last week.
Trump Media & Technology Group (TMTG) – which trades as DJT (the man’s initials) – has been on a wild ride, soaring on euphoria before being dinged by a disclosure on Monday (Apr 1) that highlighted its losses and “greater risks” from its Trump association.
While the numbers might be new, the risks surely cannot be a novel discovery. Even after the sell-down earlier this week, DJT’s financial multiples remain cartoonishly high. And unlike other social media networks, TMTG’s Truth Social has not revealed bread-and-butter metrics, such as its number of monthly active users.
There is every chance, however, that Trump supporters-turned-shareholders will provide a price floor to the stock. To them, a piece of DJT is a piece of the man himself, and if Trump were to be elected, that piece will be very valuable indeed.
If anything, this current turbulence merely plays into the Trump narrative – that of a heroic gunslinger with his back to the wall, pulling off a daring escape at the last minute against razor-thin odds. The thinner the odds, it seems, the greater the payoff of his potential triumph. It is the most Hollywood of tales, and by extension, the most American of Dreams.
Were DJT to resume its hyperbolic trajectory, the payoff for Trump could be well worth it. The listing will be a way to monetise his identity without triggering the restrictions of campaign finance regulations. The presidential hopeful could sell his stock or borrow against it after the lock-up period expires to pay off his mounting legal bills.
Gallingly enough for his detractors, there could even be change to spare after doing all that. It would be, for every pro-Maga man, a very satisfying ride off into the sunset for their hero.
But even if punters manage to hitch their wagon to Trump’s all the way to the White House, a fistful of dollars could well become a cartload of dynamite. Trump will, if past performance is any indicator, be perpetually several missteps or social media posts away from an impeachment or a lawsuit. Inasmuch as DJT is a proxy for his success, it will also be one for his problems.
Even so, short-sellers should steer clear, election victory or not. This stock could continue being more about fundamentalist beliefs than fundamentals, and many shareholders will regard their investment as more of a donation towards a cause.
It will mean little to the Trump fanbase if the firm’s commercial prospects are poor – if they even believe mainstream media’s reports on the matter. And were Trump to do something self-defeating, the stock’s fortunes might not necessarily follow.
The converse is also true – DJT the stock might go to zero, but DJT the man might continue to flourish in the minds of his fanbase, 401(k)s be damned. The good guys of Once Upon a Time in the West have long since given way to the modern outlaws of Breaking Bad and The Sopranos. In the same vein, America might still love a hero, but these days, it loves an anti-hero almost as much.
