Many are looking for quick profits from the social media company
Mohammed Al Shalloudi, a 21-year-old graduate data analyst in the United Arab Emirates who invested in Donald Trump’s social media company, has little in common with the former U.S. president’s political supporters.), but not because he believes in the business of its app Truth Social or because he is a Trump fan. He is part of an army of speculators seeking a quick lucrative trade whose bets on TMTG have made it one of the most overvalued and actively traded U.S. stocks.
Reuters interviews with more than a dozen investors that posted about their positions on social media platforms such as Reddit and X found that most were looking to score a quick profit. No other U.S. company of similar market capitalization has such a high valuation multiple, the LSEG data shows. This is despite TMTG warning investors in regulatory filings that its operational losses raise “substantial doubt” about its ability to remain in business.
The appeal of TMTG to speculators helps explain the stock’s volatility. The shares have risen as much as fivefold in the last two months and are currently valuing Trump’s majority stake in the company at about $3.8 billion. A TMTG spokesperson did not respond to a request for comment on the impact speculators are having on the company’s market value.James Angel, an associate finance professor at Georgetown’s McDonough School of Business, said it would be risky to predict when TMTG’s valuation will drop to more accurately reflect its business prospects.
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