Shares in Donald Trump’s social media company surged after he survived an assassination attempt on Saturday.
The stock of Trump Media, which operates Truth Social, jumped by about 31% at closing, after peaking 70% in pre-market trading.
Analysts attribute the rise to speculation that the incident could boost Trump’s electoral prospects for the upcoming US presidential election in November.
The former president narrowly escaped harm when a bullet grazed his ear during an election rally, with the assailant being shot dead by a Secret Service sniper shortly thereafter. Trump, in his first interview post-incident, expressed astonishment at his survival, remarking, “I’m supposed to be dead, I’m not supposed to be here.”
Prominent figures like Elon Musk publicly endorsed Trump following the attack, fueling investor optimism about increased engagement on the Truth Social platform ahead of the election.
Susan Schmidt from the State of Wisconsin Investment Board suggested that heightened interest in Trump’s postings could drive user engagement on the social media platform.
However, Cary Leahey, a Wall Street analyst, cautioned that the surge in Truth Social’s stock was more a reflection of election speculation rather than business fundamentals, noting the platform’s previous struggles with growth.
Trump founded Trump Media and Technology Group in response to his ban from major social platforms after the Capitol Hill riots, launching Truth Social as an alternative.
The company, which operates similarly to Twitter, boasts around 2 million active users, though actual figures vary. Trump remains the majority shareholder, with the current share price valuing his holdings at approximately $40 per share, totaling around $5 billion.
The fluctuating stock prices of Truth Social have often mirrored events in Trump’s personal and political life, including legal challenges and election prospects.
Despite the volatility, Thomas J Hayes from Great Hill Capital observed that the current valuation surpasses the platform’s actual business performance, suggesting that political support might be driving the stock’s surge.
The incident on Saturday claimed one life and left two others injured, with the gunman identified as Thomas Matthew Crooks.
The motive behind the attack remains unclear, while Trump credited luck or divine intervention for his survival, describing the incident as narrowly escaping a fatal outcome.
The episode has underscored the intertwining of politics and business in Trump’s ventures, with his platform’s fortunes often tied to his public persona and electoral ambitions.
Credit : BBC
https://www.bbc.com/news/articles/cz9djmd38m9o