Shares of Donald Trump’s new conservative media venture nearly doubled this week, mostly fueled by Reddit-online daytraders, but some well-known hedge funds turned out to be early investors as well.
Trump Media & Technology Group merged with a shell company called Digital World Acquisition Corp. (NASDAQ: DWAC) as a way to go public. The transaction this past week valued Trump’s group at an initial $875 million. By Friday, the company’s public valuation had shot up to $1.64 billion.
The stock, which began trading Oct. 19 at just over $10 a share, closed Friday at $108.84, more than ten times its initial price.
Reddit day-traders embraced the former president’s new social media venture, many saying they bought the stock as an extension of their political support. Trump Media promised to end “censorship” by mainstream news, and create an on-demand streaming service with “non-woke” entertainment. Trump said his company will compete with Big Tech platforms such as Facebook, Instagram and Twitter, where he was banned.
“YOU ARE SITTING ON A GOLD MINE!!!!,” wrote one poster on Reddit’s website devoted to the stock. “I’m not selling! Twitter banned the president and allowed the Taliban to have an account! This is more than just a stock! This is about your digital freedoms! We’re just getting started!!!”
Another wrote: “For guys who were in GME and AMC, we’ve seen this crap. Hang tight buy the fake dips if you can and ignore the fake manipulation because when the dust settles, the truth will win.”
Among the more traditional investors listed in filings were Saba Capital, run by a well known hedge fund manager Boaz Weinstein. Upon learning of Trump’s affiliation in the merger deal, however, Saba Capital sold nearly all its shares on Thursday, according to the New York Times.
Other investors included Hudson Bay Capital, which is run by Sander Gerber, a big donor to conservative causes and a 1989 graduate of the University of Pennsylvania.
Trump says he plans to start with a social network called Truth Social, but wants to expand into a conglomerate competing with the likes of Disney and CNN.
But is this a good long-term investment?