How can it possibly be worth $9bn?
The glib answer is "because the most recent price someone bought a share of the company at is $66.46". The valuation of a publicly traded company such as Truth Social - officially, the "Trump Media & Technology Group Corp", with the stock ticker DJT, referencing its founder's initials - is just a product of multiplying the value of an individual share with the number outstanding.
Typically, that value, known as the market capitalisation, is kept in check by reference to the "fundamentals" of the company: how much money it makes or loses, and how fast it is growing or shrinking. But sometimes... it isn't. In the case of Truth Social, its revenue during the first nine months of last year was only $3.3m from advertising, and it recorded a loss of $49m.
Why don't investors care about the fundamentals?
Historically, the big reason why stock valuations become detached from reality is speculative bubbles. Even if you don't think a company is particularly valuable, it may still be worth buying their stock at a high price if you think you can sell it on at an even higher price.
But Truth Social seems to be part of a more recent phenomenon: the "meme stock".
この記事は The Guardian の March 28, 2024 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は The Guardian の March 28, 2024 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
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