Trump Media & Technology Group, the parent company of former president Donald Trump's social media platform Truth Social, went public on March 26, 2024. Experts have likened its trading to a meme stock, given the prices seem to be driven more by popular support rather than the business's financial success or outlook.

Roaring Kitty, whose real name is Keith Patrick Gill, posted a picture on X Sunday night, followed by an onslaught of other memes and videos. Sunday's post was his first since June 2021, and it has sent some classic meme stocks skyrocketing.

Meme stock traders awakened, will they push up DJT stock?

Since Gill's return, people have been snatching up meme stocks and driving up prices. On Friday, GameStop closed at $17.46 per share. By Tuesday, it closed at nearly $50 per share. AMC has more than doubled, from a Friday starting point of $2.91 per share.

Jay Ritter, a finance scholar at the University of Florida, says that many meme stock investors work against short selling, a strategy that involves selling shares in the hopes the price will drop, then buying them back at a lower price and locking in a profit. Meme stock traders undercut that strategy by buying the stock being short sold for cheap and therefore driving prices back up. In turn, people chasing that rising stock may also buy, with hopes of cashing out before it drops back down.

"This is kind of a self-fulfilling prophecy, where you got coordinated buying going on without any explicit agreement to be a member of the club," Ritter said. "But as long as people follow the same signal, it works."

Trump Media has been arming investors with strategies to stop short selling, which is a likely part of the reason the stock has rebounded dramatically over the last month. Ritter said there may be some overlap between investors who want to squeeze Trump Media short sellers and those buying AMC and GameStop.

"Trump Media has had relatively large percentage ups and downs on a daily basis, but nowhere near as bag as AMC and GameStop," Ritter said. "So that suggests that AMC and GameStop are mainly the short term momentum traders...whereas most of the Trump media investors are ideological supporters...their trades are a little stickier."

Truth Social stock price history

Trump Media went public on the Nasdaq on March 26 through a merger with shell company Digital World Acquisition Corp., a special purpose acquisition company, or SPAC. The merger was announced in 2021.

The debut on the stock market was splashy, with Trump Media shares soaring, helped partly by – and to the delight of – his supporters.

But regulatory filings show the company was operating at a loss in 2023, making about $4 million in revenue while losing more than $58 million. Accounting firm BF Borgers CPA PC said in a letter to Trump Media shareholders that the operating losses “raise substantial doubt about its ability to continue as a going concern.”

That firm has since been shut down on allegations of "massive fraud," the SEC announced on May 3. In a news release, Gurbir S. Grewal, director of the SEC’s Division of Enforcement, called BF Borgers CPA PC a "sham audit mill" after finding that its audits, included in more than 1,500 SEC filings, did not comply with oversight standards.

Trump's legal cases come with mounting price tag

At one point, the Trump Media shares were a potential source of funding to put toward hefty legal fees. Trump was ordered to pay a combined $537 million across two civil cases earlier this year, both of which he is appealing. He has also been ordered to pay $10,000 in fines for gag order violations in his hush money trial so far.

But in April, Trump posted a reduced bond of $175 million fronted by California billionaire Don Hankey to prevent his assets from being seized in the New York fraud case.

Even if Trump Media gets swept up in another wave of meme stock booms, Trump can't cash out on his shares, worth approximately $6 billion, until the end of September, six months after going public.

Contributing: Bailey Schulz, Jessica Guynn and Jeanine Santucci