Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Trump Media

Fascinating story in the New York Times today on the debut of Trump's "Truth Social" stock, trading under DJT. Per the Times, DJT quickly achieved a market cap of $8 billion on total sales of $3 million. Since it operates at a $49 million loss, there are no earnings with which to calculate a p/e ratio. In terms of a price/sales ratio, the stock trades a 2,300 times sales. Robinhood, the biggest of the meme stocks by market cap, trades a nine times sales. At this point, Mr. Trump's stake in the company has more than doubled his net worth.

Axios declares the Trump Media is "officially a meme stock," which by definition says that the stock price is divorced from any traditional measure of value. It's purely a sentiment play which, they warn, is a dangerous game for "investors" to play. Robinhood's market cap peaked at $59 billion, today it's $17 billion. Upstart peaked at $32 billion and now sits at $2.3 billion. Investors in AMC Entertainment didn't fare as well: the market cap peaked at $32 billion and now sits at $1.1 billion. That would be ... hmm, a 96.5% decline from its peak.

Axios warns, "If we learned one thing in January 2021, it's dangerous to bet against a meme stock that's going up." Perhaps because it's held by believers rather than investors, Bloomberg reports that its the most expensive stock to try to short with borrowing costs over 200 times the average.

I wonder if state agencies in Texas are allowed to own it? And, more seriously, whether it's purely a one-off in the stock market or evidence of the underlying fragility of it?

«13

Comments

  • It will be fascinating to watch this unfold. Meme stocks have proven resilient for periods of time, and then it often falls apart.

    Purchases of DJT are really "donations" in my eyes. If you buy now and hold long-term, you don't expect to get your money back. There is no plan for generating revenues.
  • How apropos. The word for "truth" in Russian is "Pravda". Now a candidate for the presidency of the US uses the same name as a Russian state run communist propaganda newspaper from the past. I'm old enough to remember the 'red scare' and that the spread of communist ideology was a rallying call for US solidarity against it. I shake my head in disbelief.

    What is the meaning of Pravda?
    truth
    Pravda (Russian for "truth" and "justice") is a Russian newspaper, formerly the official newspaper of the Communist Party of the Soviet Union.

    Where does the name Pravda come from?
    Pravda (Правда, Truth) was the official voice of Soviet communism and the Central Committee of the Communist Party between 1918 and 1991.
  • This was a SPAC merger. Former DWAC acquired Trump Media and post-merger, changed the name to Trump Media and ticker to DJT (holdover from now defunct Trump Casinos). No new money was raised. Trump himself owns 58% of the merged entity but has 6-mo lockup. Remaining 42% can sell and take profits.

    What would be a bull market without speculative plays? Meme stocks, SPAC M&As, IPOs, ODTE options, cryptos, gold?
  • edited March 27
    JD_co said:

    It will be fascinating to watch this unfold. Meme stocks have proven resilient for periods of time, and then it often falls apart.

    Purchases of DJT are really "donations" in my eyes. If you buy now and hold long-term, you don't expect to get your money back. There is no plan for generating revenues.

    I was tempted to buy some puts on it but the premiums are insane* even waaaaay OTM. I kind of still am, but leaning towards 'no' -- not even on a lark with some 'fun money.'

    More important, I view Tweety Amin similar to Elon Musk -- both will say/do anything to goose their stock prices and public images (which often are intertwined) and both have friends overseas with very deep pockets who wouldn't mind supporting the share price even if it means they only do it for a likely tax writeoff. I daresay much of the retail holders are in it just to 'show their support' for the guy because they like the spectacle and can feel part of things.

    * current price 66.50, the $20 strikes in JAN25 are 9.50 ... heck the 2.50 strikes that month are $1.14.
  • "What would be a bull market without speculative plays? Meme stocks, SPAC M&As, IPOs, ODTE options, cryptos, gold?"

    xoxo
  • What would be a bull market without speculative plays? Meme stocks, SPAC M&As, IPOs, ODTE options, cryptos, gold?

    It would be nice for my IRA if some of the animal spirits could spill over into miners and bio tech.
  • Run away... 2 entities own about 79% of the stock from what I've read. It can go up for a long time as long as the main entities don't sell but once they start to dump look out below. It's value has NOTHING to do with the companies value. With that amount of concentrated ownership stock manipulation it easy by say a foreign entity. To me it looks like a way to funnel money to the largest shareholder. Can you say legal scam IMHO. The greater fool theory is alive and well.
  • I would love to see this sucker drop like a heavy boulder, just out of spite.
  • Donnie needs DJT's stock price to be "high" six months from now in order to properly fleece the "shareholders" and start cashing out legally.......unless he changes the charter via Board action (upon which I believe his son serves). But then he would face some new lawsuits if he pulled that stunt.

    Nobody should be surprised if he tried to change the timetable, though. A snake is going to slither.
  • edited March 28
    I read an interesting analysis of meme stock trading which comes down to the argument that meme stocks have two types of "investors," the cynical traders and the true believers. The former make up half of the owners and they pretty much live by fleecing the latter. At the first sign that Mr. Trump is dumping, they're out the door which would cause the stock to crash and the true believers to get fleeced (again).

    The same analysis suggested that, based on fundamentals, the stock is worth about $2 / share. At 10:30 EDT on 3/28, it was trading at $66 which hints at the magnitude of the downside that investors might need to accommodate.
  • The Board consists of Trump son, Devin Nunes ( ex CA MAGA congressman ) Linda McMahon ( runs World Wide Wrestling) all three true believers who will almost certainly do what DJT wants.

    I haven't bothered to look up the affiliations of the others Eric Swider, Kashyap “Kash” Patel, W. Kyle Green, Robert Lighthizer but Lighthizer was DTJ trade representative, and I would bet they didn't get appointed to the Board to provide independent guidance and direction shareholders best interests.

    A majority vote to change the lockup period is probably pretty easy to setup, but I would think once people loose lots of money when DJT unloads his stock, the class action lawyers will be gleeful.

    If DTJ sells without proper notice,I assume he could also be an SEC target. However,he can use the shares as collateral for a loan in six months
  • Kash Patel is in Trumpworld bigtime and is one of his devoted yes-men. He's the guy Trump wanted to be a hand-picked CIA Director under a political scheme until the DCI threatened to resign once the scheme came to light. He was a loyalist chief of staff to Trumpy's defense secretaries as well.
  • edited March 28
    @rforno

    I knew he sounded familar!
  • edited March 28
    sma3 said:

    @rforno

    I need he sounded familar!

    The jackwaffle even wrote a partisan fairy tale book for MAGA nutters. Truly insane, this one.
  • edited March 29
    Might be worth building a small short on Trump Media. Markets so crazy I’ve actually got smallish short positions using PSQ & SDS. Under 2% of holdings, but allowing me to stay invested in some less frothy areas (including David’s pick - LCORX).

    FD may rightly observe that 2% isn’t enough to “move the needle.” However - it does contribute to better sleep. BTW - I believe the investing landscape is likely to look a lot different after November, regardless of the outcome.
  • Bill Gross, by the way, is shorting DJT, according to today's WSJ. He tried a riff on Mr. Trump's "stable genius" sobriquet, explaining that "a patient genius" might well prevail with a short position.

    Given my general assessment of Mr. Gross's mental function (impaired, when last he was relevant), I'm going to let the two of them work it out together while I go have coffee.
  • I would rather watch the slow motion train wreck on the sideline. There are ample opportunities to make an honest buck.
  • Trump media may do well if he wins the election. If he doesn't, I'd expect it to drop like a very heavy rock.
  • I have no interest in supporting a known criminal and con man.
    I think I'll pass on DJT.
  • I have no interest in supporting a known criminal and con man.
    I think I'll pass on DJT.

    Can we at least interest you in a $60 Bible?

    Going once...

  • JD_co,

    I wasn't aware of the context for your statement.
    Oh my, I just discovered he is now peddling bibles.
    Is nothing sacred to him?
  • edited March 30
    What do Magazine Covers say about things? Guess what is Barron's Cover tomorrow?
    https://www.barrons.com/articles/donald-trump-djt-stock-truth-social-net-worth-election-1005340a?mod=hp_HERO

    Edit/Add, 3/30/24. For details, see LINK.
  • edited March 30
    JD_co said:


    Can we at least interest you in a $60 Bible?

    I'm waiting for the "previously-breathed air" canisters. The symbolism of creating something up out of thin air and then selling it appeals to my sense of the absurd.
  • edited March 30
    I dunno. He sounds sincere in that Ad.

    “It’s my favorite book.”

    “I read it all the time.”

    “We need to make America pray again.”


    When it comes to TV pitch-men, few can compare to legendary Ron Popeil.



  • So his 'bible' is selling for $59.99. Which also is '666' upside down. Irony!

    Semi-relatedly, I seem to remember the old saying that fascism will "come to America wrapped in a flag and carrying a bible."
  • Long term lurker here from the fundalarm days who has greatly benefited from the discussions. But sadly, the tone has become one of vitriol and ridicule towards those who are of a different political or philosophical bent. I’m saddened because this is taking away from what was once a great independent site that focused on undiscovered funds and excellent money managers. I hope the focus can return to that and leave the partisanship and snide comments to other websites.

    Mike
  • Mike, it's probably a good idea to avoid politics here. But at the same time, we are having a little fund with this 1 "polarizing" figure. I don't see evidence of cruelty or bitterness. And when you pull as many stunts as this guy has, maybe he deserves a jab or three.

    Separately - was wondering if I can still get me a pair of those NEVER SURRENDER Golden hightop sneakers for $399. Hope they didn't sell out already.

  • @ mnzdedwards +100

    ya, stearing clear on this thread as nothing constructive will come of it.

    Good Health and Good Luck to ALL!
  • edited March 30
    Mike - Thanks for chiming in. If you click on Yogi’s link to Barron’s you’ll see that the bright red cover photo would appear to lean Pro-Trump - or am I reading too much into it?

    I can relate to your angst. I subscribe to the WSJ - but simply ignore their right leaning editorial pages. And I continue to subscribe to Bill Fleckenstein’s daily market “Rap.”. His right leaning political opinions and occasional slams against Democrats grate my sensibilities. But I learn a lot about investing from him and the readers who write in. I don’t think either political side has a monopoly on money making skill. I’ll take away whatever I can from both.

    Where I jump ship is when people turn vitriolic against one another and start hurling insults. Hardly the case to this point.
  • FWIW, Barron's dissection of financials of DJT stock seems negative. Magazine Covers may be positive or negative - no default should be assumed.
Sign In or Register to comment.