Donald Trump’s media company Trump Media and Technology Group DJT hit the public market Tuesday after its long-awaited SPAC merger was approved by shareholders.
Here’s a look at how the company’s valuation compares to recent valuation metrics Xformally known as Twitter.
What happened: TMTG shares skyrocketed in their Wall Street debut. Investors were looking to get an equity stake as a way to invest in the former president Donald Trump.
While Trump Media & Technology Group’s full market capitalization is not known until the final number of outstanding shares is released, estimates paint a high valuation for the social media company.
As of Tuesday, the company had a listed market capitalization of $9.6 billion. By the end of the week, the social media company’s market capitalization was between $7 billion and $8 billion.
Social media platform X was purchased by Elon Musk in 2022 for 44 billion dollars. That amount is significantly more than what Trump’s media company is worth today.
Current X shareholders have discounted their holdings and lowered the valuation.
In the most recent report of Fidelitywho owns X shares of Fidelity Blue Chip Growth Fund (FBGRX), the social media company’s valuation was at a discount of 68%. This values X at approximately $14.1 billion.
Fidelity and other X shareholders reduced their stakes in the Musk-owned company after the acquisition.
This means that, based on an $8 billion valuation for TMTG, X would be worth about 1.8 times more. X has a significantly higher number of users and revenue.
As Benzinga recently reported, TMTG stock is trading at huge valuations relative to the number of users it has and its annual revenue. Bloomberg estimates show TMTG trading at 2,800 times its annual revenue.
By comparison, Twitter reported revenue of $5.22 billion in 2022, making the $44 billion purchase price at the time equivalent to about 8.4 times annual revenue.
Related Link: Investor Who Once Supported Short-Selling Ban Considers Bet Against Trump Media: ‘The Greatest Pump and Dump Stock in History’
What’s next: Investors and analysts have warned that TMTG’s valuation is incredibly high by any metric and could fall in the future.
Investors looking to bet against the company face a high borrowing cost to short the shares. Recent mentions of TMTG as a meme stock could see the stock trading without any concern about valuation from short-term traders.
As for X, Musk said he aims to make the platform an “everything” app with social media, video, payments and other features.
Musk had previously said that the potential value of X will be $250 billion or more in the future. And Fidelity, he says, “will eventually make a big comeback.”
Time will tell whether Musk is right and whether Trump Media & Technology Group shareholders also get a great return on their investment.
DJT Price Action: Shares of Trump Media & Technology Group closed 6% lower at $61.96 on Thursday, versus a 52-week trading range of $12.40 to $79.38, which counts the stock’s time as DJT and also as SPAC Digital World Acquisition Corporation.
Read next: Bad Buyout Blues: Banks Set to Refinance Twitter/X Debt from $44 Billion Acquisition
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