Shareholders of Trump Media, the parent company of Trump’s social media platform, Truth Social, voted Friday to approve a merger with Digital World Acquisition Corp, a blank-check company whose purpose is to raise funds for private companies and take them public. In anticipation of its merger with Trump Media, shares of
popped more than 100% this year. Trading has embodied the same kind of frenzy shown in Tupperware’s stock surge last July, or that of meme stocks AMC Entertainment and GameStop during the height of the pandemic. Trump Media saw a $26 million loss during the third quarter of last year, and many experts are questioning whether it is a solid bet — or dramatically overvalued. “The stock price is clearly a bubble,” Yale law professor Jonathan Macey told CNN.
declined 13.7% on Friday. and Trump Media did not immediately respond to CNN’s request for comment. What is a meme stock? Meme stocks are characterized by a cult online following and jaw-dropping swings in their price. The first meme stock was GameStop. Investors on Reddit and other social media sites in 2021 decided to bid up shares of the struggling stock to punish hedge funds and institutional firms who hoped to turn a profit from short-selling GameStop’s stock.
Shareholder Group,” where users discuss the vote and post memes and supportive messages. A list of rules pinned to the top of the chat forbids members from promoting short-selling, and urges users to provide evidence such as public filings when posting their opinions or recommendations on the new company, which would trade as Trump Media & Technology Group. “We don’t want to be accused of stock pumping or misleading investors,” one rule notes.
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