Donald Trump’s stock could collapse when his social media platform Truth Social goes public, experts have suggested.
Shareholders of Digital World Acquisition Corp. (DWAC), an existing shell company, agreed to merge with Trump Media and Technology Group (TMTG) on Friday, clearing the way for the former president’s company to go public.
Wall Street values Trump Media at around $9 billion. However, experts suggest the price will soon plummet.
Photo by Michael M. Santiago/Getty Images
“This is a very unusual situation. The stock is pretty much divorced from fundamentals,” Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, told CNN.
“The underlying business doesn’t seem to be worth much. There is no evidence this is going to become a large, highly profitable company,” he said. “I’m reasonably confident the stock price will eventually drop to $2 a share and could even go below that if the company blows through the money it got from the merger.”
“At these levels, it appears untethered to its underlying business results,” Matthew Kennedy, senior IPO strategist at Renaissance Capital, told CNN. “Eventually, valuations tend to fall back on fundamentals. That means this stock is definitely at risk of plummeting back down to earth.”
Newsweek reached out to a representative for Trump via email for comment.
This is a developing story and will be updated when more information is available.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.