Trump Media, Reddit take on the 'meme stock' mantle

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Reddit and Trump Media are the first notable social media companies to begin trading publicly in the last five years. They’re also, thanks to the rabid reception among investors coupled with the companies’ fuzzy profit outlooks, the latest meme stocks.

FILE - The Truth Social account for former President Donald Trump is seen on a mobile device, Wednesday, March 20, 2024, in New York. Reddit and Trump Media are the first social media companies to begin trading publicly in the last five years. They’re also, thanks to the rabid reception among investors, the latest meme stocks. FILE - A GameStop store in New York is shown on Jan. 28, 2021.

Trump Media lost $49 million in the first nine months of last year, when it took in just $3.4 million in revenue and had to pay $37.7 million in interest expenses. In a recent regulatory filing, the company said it will lose money “for the foreseeable future.” While Reddit and Trump Media can be considered newer technology companies, GameStop and AMC were considered to be somewhat antiquated when small investors latched onto them in late 2020 and early 2021. GameStop struggled while selling video games and consoles in stores without a digital alternative, and AMC lost billions of dollars as movie fans embraced streaming and the pandemic kept them out of theaters.

Data from Vanda Research show that retail investors bought $6.5 million of Trump Media shares on its first trading day and $7.9 million of Reddit shares for its debut.

 

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