Donald Trump’s social network has become more expensive than Elon Musk’s social network

Shares of Donald Trump’s media holding Trump Media & Technology Group (TMTG), which owns the social network Truth Social, rose sharply ahead of the US presidential election, making the company more expensive than X (formerly Twitter), owned by Elon Musk. Following Tuesday’s trading, TMTG’s market capitalization reached $10.3 billion, exceeding X’s $9.4 billion valuation, according to The Guardian.

Image source: Sergei Tokmakov, Esq. https://Terms.Law/Pixabay

TMTG shares jumped 8.8%, causing trading to be temporarily suspended due to increased volatility. The company has seen rapid growth in recent weeks, tripling its value in October alone. This happened against the backdrop of an active election campaign by Trump, who is trying to gain voter support. Trump’s personal stake in the company is now valued at approximately $5.9 billion.

Despite the fact that X significantly outnumbers Truth Social in the number of users – for example, in September X had 706.2 million visitors (according to Similarweb), while Truth Social only had 13.5 million – TMTG investors are not at all embarrassed by this fact . In addition, the market value of Trump’s company has already exceeded the capitalization of the American broadcaster SiriusXM, which has 33 million subscribers and made $316 million in profit in the second quarter. At the same time, TMTG recorded a loss of $16.4 million for this period.

Experts attribute the rise in TMTG shares to the phenomenon of so-called “meme stocks”, when companies suddenly become popular among small investors making quick trades within a single trading day. A similar incident occurred with video game retailer GameStop in 2021, whose shares skyrocketed in one day. However, sharp ups often give way to equally rapid downfalls. For example, TMTG stock, which reached $66 per share in March, fell to $12.15 in September.

However, with the US election approaching and Trump’s chances of winning again growing, stocks have begun to recover again. Thus, since September, TMTG’s market capitalization has quadrupled, indicating high investor confidence in the company’s near-term success.