Even though Donald J. Trump’s new company Trump Media & Technology Group—which began trading on Nasdaq today—is valued at $5 billion on paper, Omidyar Network reporter in residence Helaine Olen says that people should skip purchasing shares.
Stock investors typically aim to generate profits. However, this motivation differs for investors involved in meme stocks—companies such as Digital World Acquisition that surged during the pandemic due to online hype rather than solid financial performance. These investors often have a unique mindset, believing that they can profit while challenging established power structures, such as Wall Street hedge funds or authorities targeting financial misconduct, Olen wrote. This dual objective leads them to engage in “motivated reasoning,” where they rationalize investment decisions despite unfavorable fundamentals.
“If retail investor planning to buy Truth Social did disinterested research, they would hardly be investing into the site,” Olen said. “Popular it’s not … Truth Social’s revenues are, not surprisingly, paltry.”
However, Olen believes that Trump’s fans will likely purchase stock and keep the share price elevated. “They’ve never objected to his financial dodginess,” she wrote. “If anything, it’s part of his appeal—in their eyes, he’s the guy who is smart enough to outsmart the system.”
