Starting Tuesday, there's a new company on the Nasdaq: Trump Media & Technology Group, which will trade under the stock ticker DJT.
DJT, of course, stands for Donald John Trump, underscoring the company's raison d'etre — giving a megaphone (and a serious cash infusion) to the presumptive Republican nominee. The company's main product, Truth Social, was Trump's quick and dirty solution to his ban on practically every mainstream social media app in the wake of the January 6, 2021, attack on the US Capitol.
The social media app was never a blockbuster, though, and it's unclear how the company will ever make money.
If that all sounds familiar, that's because we've been down this road before.
While Trump Media may be new, its stock ticker is a throwback to Trump's only other publicly traded company. Trump bestowed the same initials on his Atlantic City casino business, Trump Hotels and Casino Resorts, back when that company went public in 1995.
It didn't go great. At least, not for investors.
Trump Hotels and Casino Resorts never turned a profit and ended up in bankruptcy in 2004, wiping out shareholders.
Trump's company lost money every single year of its existence, putting it more than $600 million in the red — despite owning premier Atlantic City casinos, including the Trump Taj Mahal, a place so opulent Trump called it "the eighth wonder of the world."
The stock lost 90% its value in its first five years as a public company.
Yet Trump himself made out fine.
Between 1995 and 2004, Trump took home about $40 million in salary, bonuses and options — not unusual for a CEO. Then there were the less common moneymaking methods, including consulting contracts, licensing deals and reimbursements for the use of his personal jet and golf courses. Those atypical payments made up about half of the money Trump made during his tenure as the company's leader.
"The money I took out of there was incredible," Trump told the New York Times in 2016.
Trump's stock holdings were wiped out in the bankruptcy. But he continued to make millions of dollars from the company after it came out of bankruptcy, pocketing $6.1 million from the re-named Trump Entertainment Resorts company, which traded under a new ticker — you guessed it! — TRMP.
The new name and ticker didn't help the company, though. It lost $2 billion over five years and filed for bankruptcy a second time in 2009.
Like its predecessor, the new DJT is enjoying some market enthusiasm following the merger between Trump's media entity and Digital World Acquisition Corp. Shares of DWAC surged 40% Monday and are up over 170% over the past six months.
But a look at the fundamentals suggests the stock is wildly overvalued. Trump Media generated just $3.4 million of revenue through the first nine months of last year, according to SEC filings.
"The stock price is clearly a bubble," Yale law professor Jonathan Macey told my colleague Matt Egan last week. "No rational investor would take the stock at face value, especially if they had to hold it for any length of time."
Meanwhile, Truth Social's user base is shrinking – more so than that of X, the company formerly known as Twitter.
At current prices, Trump's stake is valued at about $4 billion. In theory, he's not allowed to sell that stock for several months after trading begins. But there could be workarounds to that so-called lock-up period, if the company's board of directors allow it.
And the board may be more amenable to green-lighting that now that Trump's civil fraud bond obligation has shrunk by more than 60%. Trump would have to sell a much smaller sliver of his stake in Trump Media to cover his modified bond payment — $175 million, down from $454 million — to cover any shortfall.
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