While Donald Trump will have to wait six months to sell shares of Trump Media and Technology Group (TMTG), some people are already turning a profit on the publicly traded social media company - banking on the enthusiasm of the former president's supporters to drive stock prices high.
"It was a no-brainer. You buy the stock, wait for Trump's fan base to hear about it, and enjoy your profit," Mohammed Al Shalloudi, a 21-year-old in the United Arab Emirates, told Reuters.
TMTG's stock value had already plummeted by Monday morning - decreasing from $48.66 per share to $35.36, but not before some investors had already made a profit.
Al Shalloudi invested $4000 in TMTG stock at $37 per share, before cashing out when stock prices reached $65 per share. He's not alone in this venture - many people, who have little faith in Trump's company, bought shares with the assumption that Trump supporters would overvalue the stock.
"I invested $10,000 last Tuesday because MAGA is crazy and they will pump the stock," a 21-year-old software developer told Reuters.
Trump founded Truth Social in 2022, a year after he was banned from major mainstream social media platforms in connection with the Jan. 6 U.S. Capitol riot. Though Meta and X, formerly Twitter, subsequently reversed the bans, the former president still prefers using his own platform.
Even with the former president's backing, however, Truth Social has struggled to establish itself as a major player in social media. While it has more active users than other right-wing social platforms, like Gettr, it still trails industry giants like TikTok and Facebook, the Associated Press reported.
The company also reported a net loss of $49 million in the first nine months of its existence while its user base continued to shrink.
The pump-and-dump scheme that some investors engaged in can be viewed as another instance of a meme stock - a phenomenon that first took off during the pandemic. Other instances of meme stocks include AMC and Gamestop - with the latter phenomenon resulting in the company's stock price increasing by nearly times its valuation in one month.
"I think the investors here are either speculators or amateurs just looking to make a quick buck in a highly volatile stock, and there are really no fundamental underpinnings," Accelerate CEO Julian Klymochko told Reuters, describing TMTG as "the mother of all meme stocks."
