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Retail investors adopt meme-stock mentality, vow never to

sell

shares

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Trump Media's ( DJT ) value so far detached from fundamentals

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Shares swung wildly last year

By Michelle Conlin

NEW YORK, Jan 20 (Reuters) - One night in late October,

Whitney Patterson spotted a YouTube video about people buying

shares in Trump Media & Technology Group ( DJT ), the U.S.

president-elect's social media and streaming company.

Patterson had never heard of Trump Media ( DJT ) and had never

invested in a stock on her own. But that night, Patterson, whose

family owns a pickle business, moved a third of the cash in her

retirement fund into Donald Trump's company.

About a week later, she voted for him too.

Patterson said because Trump has vowed to never sell,

neither will she. She believes the shares will become so

valuable they will provide a legacy for the three young

daughters she schools in her Pittsburgh home.

"I know how important Truth Social is going to be in my

lifetime and for my girls' future," said Patterson, of the

social-media platform owned by Trump Media ( DJT ). "I'm not pulling

out." She did not want to publicize the amount she invested.

Patterson, 45, is one of 600,000 retail investors whose

fortunes are linked with those of the president-elect they

support, and they see Monday's inauguration as a turning point

for the stock.

Trump owns a 53% stake worth $4.6 billion. Retail investors

are the company's second-biggest ownership group, owning more

than a quarter of it.

Some of the 39,000-member $DJT stock group on Truth

Social gathered in Washington, D.C., over the weekend to pass

out company swag and then watch Trump take office for the second

time on Monday.

"This is a landmark moment for Trump and for the stock,"

said Patterson, who will watch from afar.

In thousands of messages on social media stock chat groups,

and in more than a dozen interviews, Trump Media's ( DJT ) small

investors professed the same never-sell approach that animated

GameStop mania and the bitcoin frenzy that saw the

cryptocurrency break $100,000 after the November presidential

election.

"I knew nothing about the stock market but I bought mainly

for my support and belief in Trump," said George L. Paschall,

46, who works for a flooring company in Saginaw, Michigan.

Investors say they are well aware of Trump Media's ( DJT ) status as

a meme stock, one that gains popularity through social media.

But they say they are impervious to its wild price swings

because they believe the company, which served as a proxy for

Trump's election odds, will become more valuable as Trump

returns to the White House.

In social-media posts and interviews, they speculated that X

owner Elon Musk and Trump could merge their social-media

platforms. They also point to efforts by Trump Media ( DJT ) to

investigate the possibility of naked short selling before the

election.

Others say they believe that by investing, they are

supporting the "patriot economy." As Trump's presidency begins,

"the momentum and support will be unstoppable," Patterson said.

Shares closed on Friday at $40.03, up 18% since Election Day

but down from their 2024 high of $79.38 in March. The stock fell

last year as low as $11.75 in September.

In the weeks after Trump won the election, informal polls

taken in Trump Media ( DJT ) chat groups predicted the stock hitting

$120, $1,000 or $1,776 before Inauguration Day.

The company's $8.7-billion market cap remains detached from

its business fundamentals. On election night, it reported a

third-quarter net loss of $19.2 million on revenue of $1

million, with a cash balance of $672.9 million.

"DJT remains a typical meme stock with a loyal retail holder

base that trades on speculation, opposed to fundamental value,"

said Matthew Unterman, managing director of analytics firm S3

Partners.

The Trump Organization, the Trump transition team and Trump

Media ( DJT ) did not respond to requests for comment.

GOLF CLUBS TO SOCIAL MEDIA

When Trump left the White House in January 2021, his net worth

was $2.4 billion, according to Forbes magazine. His holdings

were made up of real estate, private country clubs and licensing

deals.

Forbes now estimates Trump's net worth at $6.7 billion. His

stake in Trump Media ( DJT ) makes up, on paper, the biggest chunk of

his fortune. Trump has nominated three Trump Media ( DJT ) board members

to serve in his administration.

That does not include the value of a digital token called

$Trump, branded with an image from Trump's attempted

assassination in July, that Trump launched Friday night during

the first-ever, black-tie Crypto Ball, whose VIP packages cost

$100,000. Guests swilled cocktails and ate mini lobster rolls

and Trump's favored McDonald's burgers and fries.

The price of that "meme coin" was around $60 Sunday

morning, giving it a market cap of $12.23 billion, according to

CoinMarketCap.

Truth Social is far smaller in number of users than dominant

social-media platforms. But in the fourth quarter of 2024,

monthly active users on its mobile app were up 30%

year-over-year as the platform benefited from international

launches in countries such as Turkey, Argentina and Nigeria,

according to market intelligence firm Sensor Tower.

In December, Trump transferred his Trump Media ( DJT ) shares into a

revocable trust controlled by his son, Don Jr. The Trump

Organization said this month Trump will hand daily management of

his holdings to his children when he takes office, repeating an

arrangement he made during his first term that some ethics

experts said still posed conflicts.

The stock's retail faithful say they are banking on the next

big bump.

As one $DJT stock group participant posted: "We are owners

in a gold mine."