Donald Trump's social media venture soared 16% in its trading debut on Tuesday, delivering a windfall of billions of dollars to the former president's net worth. The question now is how soon he can tap into that money.
The surge in shares values the company at over $7 billion, even though it only had over $3 million in sales and lost nearly $50 million through the first nine months of last year.
Trading in Trump Media & Technology Group, the company behind the Truth Social app, was so frantic that it was briefly halted at one point.
The company started trading under the stock symbol DJT, or short for Donald J. Trump, and thousands of the former president's supporters are believed to have piled into the stock.
At the end of trading, Trump's stake was worth more than $4 billion — a paper gain that comes as he faces a slew of legal cases. But as of now, he won't be able to sell his shares for another six months.
The current valuation "is completely detached from any sort of fundamentals," said Julian Klymochko, founder and CEO of Accelerate Financial Technologies.
Klymochko called the windfall "a lottery ticket" for Trump.
"DJT is the mother of all meme stocks, where it's more of a political movement or just a speculative meme stock that's completely detached or unrelated to the underlying business fundamentals of Truth Social," he said.
The company avoided the heavy regulatory oversight that comes with an initial public offering, opting to list instead in the Nasdaq exchange. It did so by merging with an already listed shell company, in a process called a backdoor listing.
Trump is now in the Bloomberg Billionaires Index
The performance of Trump Media has propelled the former president into the ranks of the 500 wealthiest people on the influential Bloomberg Billionaires Index for the first time.
Trump's real net worth has always been disputed however, making it hard to get a true sense of how much he's actually worth.
While Trump stands to gain billions thanks to his more than 50% ownership of Trump Media, he can't sell just yet— unless he's able to renegotiate his current agreement.
Trump Media's board, however, is full of friendly directors. It includes his son, Donald Trump Jr., and former administration officials who served under him including U.S. Trade Representative Robert Lighthizer.
Trump Media is also led by former California Rep. Devin Nunes, a strong supporter of the former president.
In less than two weeks Trump must post a $175 million bond in a civil fraud case. If he could sell his shares now, he would be able to use the money to pay off the mounting bills from his legal cases.
A significant sale of shares, however, could hurt scores of Trump supporters who have bought into his company.
