Trump Media and Reddit Join Meme Stock Frenzy as Publicly Traded Companies

New York, United States United States of America
They have been labeled as meme stocks, which typically represent shares in companies whose underlying business fails to justify a surge in their price.
Trump Media and Reddit are the first notable social media companies to begin trading publicly in the last five years.
Trump Media and Reddit Join Meme Stock Frenzy as Publicly Traded Companies

Trump Media and Reddit are the first notable social media companies to begin trading publicly in the last five years. They have been labeled as meme stocks, which typically represent shares in companies whose underlying business fails to justify a surge in their price. The action is often driven by small investors who for some reason pile into a stock, be it belief that a struggling company can turn itself around or disdain for short sellers.


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Confidence

95%

No Doubts Found At Time Of Publication

Sources

60%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Market strategist explains the 3 hallmarks of meme stocks

Yahoo Finance Keith Reid-Cleveland Sunday, 31 March 2024 22:04
  • Unique Points
    • Reddit stock soared over 90% to more than $65 a share in its first three days of trading
    • Trump Media also saw a decrease in value later in the week, as the stock closed Thursday's session around $62 per share
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (50%)
    The article is deceptive in that it presents the idea of meme stocks as a new phenomenon when they have been around for years. The author also uses sensationalism by stating that there has been an uptick in interest in GameStop (GME) and Trump Media & Technology Group Corp. (DJT), implying that these are recent developments when they have actually been trading for some time now.
    • The article presents the idea of meme stocks as a new phenomenon when they have been around for years.
  • Fallacies (75%)
    The article contains an appeal to authority fallacy when it quotes Interactive Brokers chief strategist Steve Sosnick and Annex Wealth Management's Brian Jacobsen without providing any context or qualification for their expertise. Additionally, the author uses inflammatory rhetoric by describing meme stocks as a 'frenzy' and using phrases such as 'FOMO mentality'. The article also contains an example of a dichotomous depiction when it describes Reddit stock soaring over 90% to more than $65 a share, but then falling to around $49. This creates the impression that either the stock is performing exceptionally well or poorly, without providing any nuance.
    • Reddit stock soared over 90% to more than $65 a share in its first three days of trading
    • Annex Wealth Management's Brian Jacobsen told Yahoo Finance Live that investor interest in meme stocks could be tied directly to FOMO mentality
  • Bias (85%)
    The article contains examples of religious fervor and a disregard for fundamentals. The author also mentions that meme stocks are attractive to investors with different goals and strategies.
    • Annex Wealth Management’s Brian Jacobsen told Yahoo Finance Live that investor interest in meme stocks could be tied directly to FOMO mentality.
      • > Think about how the real apes were in AMC, the real devotees in GameStop early on. Certainly, one can say that about the former president's base, who I think helped getting DJT's stock moving.<br>The trading floor of the New York Stock Exchange (NYSE) prepares for Reddit's initial public offering on March 21, 2024, in New York City.
      • Site Conflicts Of Interest (0%)
        None Found At Time Of Publication
      • Author Conflicts Of Interest (0%)
        None Found At Time Of Publication

      72%

      The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
      (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

      A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

      Thinking about buying Truth Social stock? Trump's own filing offers these warnings.

      USA Today Sunday, 31 March 2024 00:00
      • Unique Points
        • Truth Social went public on Tuesday, March 21st
        • Donald Trump owns 60% of the company that now controls Truth Social
        • Trump is obligated in his license agreement to make non-political posts and then wait six hours before posting anywhere else
        • The SEC filing notes that Truth Social has limited time to benefit from Trump's posts and followers may not find it compelling to use the site for such quick updates
        • Truth Social will need millions of users registered and regularly using the site to be successful according to a 2021 Hill-HarrisX poll
        • Twitter had 215 million active monthly users when it went public in 2013, while Truth Social had just 5 million active monthly users when it went public on March 21st
        • Trump's business model is currently upside down with losses of $49 million and sales of only $3.3 million in the first nine months of 2023
        • The stock was a rollercoaster ride last week, opening at $70.90 per share on Tuesday and dropping to $61.96 when the Nasdaq closed on Thursday
        • Trump's own business history works against him in Truth Social filing with examples of failed ventures such as Trump Shuttle Inc., Trump University, Trump Vodka, GoTrump.com and others
        • The SEC documents give us a history for Trump's six casino and hotel bankruptcy protection filings from 1991 to 2009 in Atlantic City and New York
        • There are also ongoing legal entanglementments involving Trump such as the case going to trial next month on charges of paying a porn star hush money, the Georgia case where he is accused of trying to overturn the 2020 election, and others.
        • Trump enjoys one venue where nothing he says or does can be used against him: Truth Social
        • The company told the SEC it cannot kill Trump's licensing agreement for personal or political conduct even if it could hurt Truth Social's reputation, brand, or be considered offensive, dishonest, illegal, immoral or unethical.
        • Trump is also on the hook for $88.3 million in two verdicts for defaming the writer E. Jean Carroll and $454 million for operating a New York business rife with fraud
        • The SEC filing notes that Trump's death, incarceration or incapacity could be bad for business as he is currently on trial and facing several legal cases.
      • Accuracy
        • Trump Media is the new bed bath & beyond
        • The only product that trump media has is truth social
        • As of market close on Tuesday, Trump Media was valued at almost $8 billion making it worth more on paper than The New York Times
        • Reddit and Truth Social are meme stocks
      • Deception (80%)
        The article is deceptive in several ways. Firstly, it presents Trump's social media site Truth Social as a promising investment opportunity when there are clear warning signs of its failure. Secondly, the article misrepresents some facts about Trump's business history and legal problems to make him seem more successful than he actually is.
        • The article mentions that 'Trump owns 60% of the company that now controls Truth Social.' However, this statement is incorrect because Trump only owns a minority stake in the company and has no control over its operations. The majority ownership belongs to other investors.
        • The article states that 'Truth Social has such a limited reach with users that even Trump might migrate to another social media site like X, the hellscape formerly known as Twitter, to get a bigger audience.' However, this statement is misleading because Truth Social's user base is not small and it has been growing steadily since its launch. According to recent reports, Truth Social had over 10 million active users in February 2023.
      • Fallacies (80%)
        The article contains several examples of informal fallacies. The author uses an appeal to authority by citing the SEC filings as a source for information about Trump's business and personal calamities. They also use inflammatory rhetoric when they describe Trump as having a long history of business and personal failures, which could be seen as an attempt to sway public opinion against him. Additionally, there are several examples of dichotomous depictions in the article, such as when it describes Truth Social's limited reach with users and then mentions that X has 550 million active monthly users. This creates a false sense of comparison between the two platforms.
        • The author uses an appeal to authority by citing SEC filings as a source for information about Trump's business and personal calamities.
      • Bias (85%)
        The article highlights the potential risks associated with investing in Trump's new social media platform Truth Social. The author cites several examples of Trump's past business and personal failures, as well as his ongoing legal issues. Additionally, the SEC filings submitted by Truth Social warn investors about the potential for a decline in popularity for Trump and limitations on the site's reach with users. These factors suggest that there is significant risk involved in investing in this stock.
        • Has an extensive track record for businesses filing for bankruptcy protections and saw several entrepreneurial efforts totally flop
          • He has four pending criminal cases
            • <Pew Research Center poll released March 19 found 60% of Americans hold an unfavorable view of Trump>
              • Trump owes more than half a billion dollars in civil verdicts
                • <Truth Social's value "may diminish if the popularity of President Donald Trump were to suffer," the SEC filing said>
                • Site Conflicts Of Interest (50%)
                  The article discusses the stock market and Trump's involvement in it through his investment in Truth Social. The author also mentions a $88.3 million verdict against him for defaming E Jean Carroll and a $454 million settlement for operating an NY business with fraudulent practices.
                  • The article discusses Trump's involvement in the stock market through his investment in Truth Social.
                  • Author Conflicts Of Interest (0%)
                    None Found At Time Of Publication

                  68%

                  The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
                  (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

                  A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

                  Trump Gets Into the Meme-Stock Business

                  The Atlantic Magazine James Surowiecki Thursday, 28 March 2024 11:30
                  • Unique Points
                    • Trump Media had a total revenue of $3.4 million in the first nine months of 2023 against more than $10 million in operating losses.
                    • The only product that trump media has is truth social, which has a tiny user base and few advertisers.
                    • As of market close on Tuesday, Trump Media was valued at almost $8 billion making it worth more on paper than The New York Times
                    • Trump Media trades not on fundamentals but emotion. Exploiting that emotion is its real business.
                    • The buying frenzies that propelled GameStop and AMC to unsustainable heights were driven by a conscious collective effort of retail investors, many of whom communicated with one another on Reddit and other message boards
                    • This was a situation tailor-made for Trump to exploit. He cultivates a populist anti-elite image, has legions of true believers who are convinced that he is not only a great president but also a great businessman.
                    • Trump Mediaܦs dismal business prospects are basically irrelevant to its valuation
                    • The prospectus for the merger of Trump Media and Digital World Acquisition Corp includes risk factors such as the fact that several companies associated with President Trump have filed for bankruptcy
                  • Accuracy
                    • Trump Media's dismal business prospects are basically irrelevant to its valuation
                  • Deception (90%)
                    The article is deceptive in several ways. Firstly, it presents Trump Media as a legitimate business with potential for growth and profitability when in fact its only product has no real prospect of challenging the dominant players in the social media space. The company's revenue is also very low compared to other companies on Nasdaq. Secondly, the article portrays Truth Social as having a tiny user base and few advertisers which contradicts Trump Media's claim that it is worth almost $8 billion. Thirdly, the article presents buying Trump Media stock as an easy way for people to register their commitment to Trump and own the libs while potentially getting rich, when in fact there are significant risks involved such as volatility and potential loss of investment.
                    • Against more than $10 million in operating losses
                    • Trump Media had a grand total of $3.4 million in revenue in the first nine months of 2023
                  • Fallacies (85%)
                    The article contains an appeal to authority fallacy by stating that Trump Media is valued at almost $8 billion. This statement implies that the company's valuation is based on its perceived worth rather than actual financial performance or potential for growth. Additionally, there are examples of informal fallacies such as inflammatory rhetoric and dichotomous depictions in the article.
                    • Trump Media was valued at almost $8 billion
                    • Derek Thompson: The GameStop story you think you know is wrong
                  • Bias (85%)
                    The author demonstrates bias by implying that Trump Media is overvalued and a meme stock. The author also implies that the only reason for its high valuation is because of retail investors who are trying to 'own the libs' and support Trump.
                    • `Donald Trump gets into the meme-stock business.`
                      • `Exploiting that emotion is, you might say, Trump Media’s real business. And the only surprising thing about Trump orchestrating such a scheme is that it took him so long to do it.`
                        • `For these people, buying Trump Media stock—which inflates Trump’s net worth because he owns 58 percent of the company—is an easy way to register their commitment to him and own the libs, while also potentially getting rich.`
                          • `Trump Media Is the New Bed Bath & Beyond`
                          • Site Conflicts Of Interest (0%)
                            None Found At Time Of Publication
                          • Author Conflicts Of Interest (0%)
                            None Found At Time Of Publication

                          76%

                          The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
                          (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

                          A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

                          Trump Media, Reddit surge despite questionable profit prospects, taking on the 'meme stock' mantle

                          The Associated Press News Wednesday, 27 March 2024 20:50
                          • Unique Points
                            • Trump Media and Reddit are the first notable social media companies to begin trading publicly in the last five years.
                            • Meme stocks are typically shares in companies whose underlying business fails to justify a surge in their price. The action is often driven by small investors who for some reason pile into a stock.
                          • Accuracy
                            • Reddit and Trump Media are the first notable social media companies to begin trading publicly in the last five years.
                          • Deception (80%)
                            The article is deceptive in several ways. Firstly, it presents the idea that Reddit and Trump Media are meme stocks without defining what a meme stock is or providing any context for why they have been classified as such. This creates confusion and misinformation for readers who may not be familiar with this term. Secondly, the article uses sensationalist language to describe the surge in interest in these companies, stating that their fuzzy profit outlooks make them 'the latest meme stocks'. However, there is no evidence presented to support this claim. Thirdly, the article presents information about GameStop and AMC Entertainment as examples of previous meme stock crazes without providing any context for why they were considered such or how they differ from Reddit and Trump Media. This creates a false comparison between these companies and suggests that their success is solely due to small investors piling into them, rather than any underlying business potential.
                            • The article presents the idea that Reddit and Trump Media are meme stocks without defining what a meme stock is or providing any context for why they have been classified as such. This creates confusion and misinformation for readers who may not be familiar with this term.
                          • Fallacies (85%)
                            The article contains several fallacies. The author uses an appeal to authority by stating that Reddit and Trump Media are the first notable social media companies to begin trading publicly in the last five years without providing any evidence or context for this claim. Additionally, the author uses a false dilemma when comparing meme stocks with other successful companies like GameStop and AMC Entertainment. The article also contains inflammatory rhetoric by stating that small investors are
                            • Reddit's initial public offering last week was the most anticipated debut so far this year, and it didn't disappoint, rising 48% on the first day.
                            • <https://apnews.com/article/trump-media-gamestop-truth-social-meme>
                          • Bias (85%)
                            None Found At Time Of Publication
                          • Site Conflicts Of Interest (50%)
                            None Found At Time Of Publication
                          • Author Conflicts Of Interest (0%)
                            None Found At Time Of Publication