$Trump Media & Technology (DJT.US)$(hereinafter referred to as DJT for short) On the first day of listing on the NASDAQ, an intense drama of volatility was staged, once again explaining Trump's strong influence.

On Tuesday, when the stock opened, it surged about 56% to $78 per share. It then fell all the way down, closing at $57.99, narrowing the increase to around 16%. Since this year, the cumulative increase in the stock price has reached an astonishing 200%, and any of the top seven US technology companies have to say that in the face of its increase.

At a price of 78 US dollars per share, DJT's market capitalization has already exceeded 8 billion US dollars, but this is far from the end. Although the stock price is like a roller coaster, Wall Street's current valuation of DJT has reached 11 billion US dollars, which is equivalent to nearly double the closing price on Tuesday.

What's even more outrageous is that Wall Street honestly said that behind DJT's valuation is all emotion, and there is no rationality.

The reality is that DJT's losses have accumulated over time, and its main product, Truth Social, has fewer and fewer customers. Trump is constantly burning money, yet investors are still snapping up its shares. This ridiculous situation has made DJT a demon stock within a demon stock.

Only worth $2

Jay Ritter, a finance professor at the University of Florida's Wallington School of Business, said that the DJT stock is almost completely detached from fundamentals. It is more similar to the previous meme stocks GameStop (GameStop), AMC, etc., which have experienced a sharp rise in stock prices in violation of financial laws due to the support of retail investors.

Ritter believes that the stock price of this “Trump concept stock” is only about $2, far lower than the $58 that closed on Tuesday. DJT's basic business is not worth much, and there is no evidence that the company will become a large, high-profit company in the future.

According to financial documents, DJT's revenue for the first three quarters of last year was only 3.4 million US dollars, while losses reached 49 million US dollars. Referring to the recently listed “American Tieba” Reddit, the company's revenue in 2023 was around $804 million, while the valuation only reached $6.4 billion.

At the same time, the situation of Truth Social's social networking software continues to deteriorate. The total number of monthly active Apple and Android users of the app in February was less than 500,000. Compared to X's 75 million users and Facebook's 142 million users, this is nothing short of a mirage tree. Other data shows that Truth Social's monthly activity contracted by more than 50% year on year in February.

Matthew Kennedy, senior IPO strategist at Renaissance Capital, has no choice but to admit that the current DJT is not affected by basic business performance at all, but in the long run, stock prices will definitely return to fundamentals, which means that a sharp decline is inevitable.

An avid bubble blower

Everyone agrees that DJT is a huge bubble, but history shows that the bubble will always expand further until the day it bursts. The problem is that it is difficult for the market to determine when the bubble will burst.

Michael Ohlrogge, an associate professor of law at New York University, pointed out that meme stock experience shows that even if they eventually return to fundamentals, this process can take a lot of time. He said there are plenty of reasons to believe that Trump's enthusiastic supporters will allow DJT to experience high stock price inflation for a longer period of time.

However, the 2024 general election could set an end point for DJT expansion. According to a document from last month, after the presidential election results come out, if Trump is elected President of the United States, he may sell his shares in DJT and stop participating in management.

Furthermore, the lawsuits surrounding Trump and the high legal costs it entails may also cause Trump to sell DJT shares after a six-month ban period, causing his fanatical followers to quickly decline and cause the stock price to plummet.

But that doesn't mean the future of DJT remains bleak. Just imagine, if Trump were elected President of the United States and he posted on Truth Social every day, would everyone really be able to resist joining this social platform that is currently watching “lame”?

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