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Donald J. Trump is not just a U.S. presidential candidate. As of this week, he’s also a stock – and laugh all you want but the stock has a couple of things going for it.

Mr. Trump’s social-media company, Truth Social, launched in 2021 as a freewheeling alternative to Twitter (now X) and Facebook after the former president was exiled from major platforms. On Tuesday, the stock began trading on the Nasdaq exchange under the parent company’s name, Trump Media & Technology Group Corp.

The ticker: Mr. Trump’s initials, DJT-Q.

So far, the Republican presidential nominee’s direct connection to the stock appears to be working wonders. The stock rallied 16 per cent on its first day of trading.

The listing arose from a merger with Digital World Acquisition Corp., a special purpose acquisition company, or SPAC, that already had a public listing on Nasdaq.

Late last year, well before the official merger, Digital World shares generally traded below US$18, reflecting a dismal stretch for the broader stock market, declining interest in SPACs and a crowded field of Republican presidential hopefuls, including Nikki Haley and Ron DeSantis.

But as Mr. Trump’s political fortunes have risen, so too have shares affiliated with Trump Social.

Digital World shares rallied to a high of US$50.75 in January and traded at US$49.95 on Monday, the last day of trading under the old name and ticker.

On Tuesday, Trump Media soared as high as US$79.38 shortly after the start of trading, for an initial gain of 59 per cent, before settling back. The shares closed at US$61.32, valuing the company at nearly US$8-billion.

Sure, Trump Media faces enormous challenges.

Truth Social is a small player in a crowded field of much more established social-media competitors, including Meta, X and Reddit. The stock is incredibly expensive: Despite generating sales of just US$5-million since launching in 2021, the company is worth more than Air Canada and West Fraser Timber Co. Ltd.

And yes, Mr. Trump needs cash to pay a US$175-million bond associated with a civil fraud judgment against him. That means he could be looking at ways to sell some of his 60-per-cent stake in Trump Media, despite rules that typically prohibit sales by insiders during the first six months of a new listing.

It’s a crazy stock. Still, let’s have some fun here and look at two drivers that could make investors happy.

First, this looks like an emerging meme stock – a holding that has gone viral among small investors on investing forums – and meme stocks can trade irrationally for a lot longer than you might think.

In one of the more notorious examples of this phenomenon, GameStop Corp. rocketed above US$86 a share in January, 2021, (after adjusting for a four-for-one share split in 2022) as investors piled on to a stock that had been drifting at about US$1 in mid-2020.

Most meme stocks are well off their highs, and the phenomenon has faded. The Roundhill MEME ETF, an exchange-traded fund that provided one-stop exposure to the trend, announced it was shutting down late last year.

Nonetheless, the trend may not be dead. GameStop’s current share price is about 13 times its pre-meme level. And Trump Media has at least one feature that lines up with previous meme stocks: Bets against the stock from short sellers are rising.

“Tiny float. Insiders can’t sell shares for six months. I think this is a $200-$300+ stock by the election,” one investor posted on X this week.

Second, Truth Social likely enjoys a loyal investor base of Make America Great Again – or MAGA – diehards that will remain glued to Mr. Trump for political reasons.

While most investors would want to see profits, advertiser interest, rising market share or a surging number of active users, none of that matters right now. Mr. Trump’s base might be satisfied with an outspoken presidential candidate at the company’s helm, if only in name.

Owning the shares offers a simple way to support Mr. Trump on his political journey, and investors don’t even have to be registered American voters to do so.

“I think we’ll see people buying Truth Social, or DJT, because they want to send a message to Washington. They want to send a message that they support President Trump,” David Nicholas, founder of Georgia-based Nicholas Wealth Management, told Fox Business this week.

This ideological support could provide a bullish underpinning to the stock until the election in November. And if Mr. Trump wins the White House? Yikes. Investors can only dream.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 20/05/24 6:55pm EDT.

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Trump Media & Technology Group Corp

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