SignalHub-What's in a name? Maybe a higher stock. Trump's Truth Social to trade under his initials

Donald Trump’s name can SignalHubbe found on hotels, at golf resorts and even on NFT trading cards. Soon, it’ll be on the stock market, too. 

The parent company of Truth Social, the social media platform the former president launched after getting booted from Facebook and Twitter after the Jan. 6 Capitol attack, could start trading on the stock market as early as next week.

The ticker symbol the new company plans to use? DJT, for Donald J. Trump. 

Why is Truth Social's stock symbol DJT?

This isn’t the first time Trump’s initials have been used as a stock symbol. The same ticker was used by Trump Hotels and Casino Resorts, the casino company that filed for bankruptcy and delisted from the New York Stock Exchange in 2004. 

Bringing Trump's initials back to the stock market could help boost investor interest, says Russell Jame, associate professor of finance at the University of Kentucky.

“That association is desirable for a certain subset of people,” Jame says.  

Truth Social’s parent − Trump Media & Technology Group − is set to merge with Digital World Acquisition Corp., a special-purpose acquisition company, or SPAC. Also referred to as blank-check companies, these publicly traded shell companies exist to acquire or merge with private companies and begin selling their stock to the public. 

The merger could boost Trump's net worth by more than $3 billion, a major windfall as Trump faces massive penalties in court.

Trump's financial woes:Can his Truth Social deal save him from a cash crunch? Maybe.

Trump's Truth Social to go public:Parent company to merge with SPAC Digital World Acquisition Corp.

Will the ticker name boost Trump Social's stock price?

A company’s profitability is the No. 1 driver of stock performance, says Jame of the University of Kentucky, but a familiar name like DJT can certainly help. 

Research has also shown that a company’s stock ticker symbol can influence its performance. One 2006 study by Princeton University psychologists found that stocks with tickers that are easier to pronounce tend to perform better in the first few days of trading.

“People take mental shortcuts, even when it comes to their investments, when it would seem that they would want to be most rational,” Danny Oppenheimer, an assistant professor of psychology at Princeton, said when the research results were announced.

Another study from Pomona College in 2019 verified earlier research that found clever tickers tend to perform better, partly because they are more memorable to investors.

When is Truth Social going public?

Digital World’s shareholders voted in favor of the merger on Friday. The merger could be finalized as soon as next week, but it faces legal challenges.

Digital World’s former CEO Patrick Orlando has sued to block the merger, arguing that he is entitled to more shares. Two former Trump business associates, Andy Litinsky and Wes Moss, have filed a similar lawsuit.  

The Digital World merger was first announced in 2021, when the number of companies going public via SPACs surged. The investment vehicles have since faced criticism for being bad deals for retail investors.

“SPACs have a very strong historical pattern of losing a lot of value post-merger,” said Michael Ohlrogge, a New York University law professor who researches SPACs. 

What’s Digital World's stock price? 

Shares of Digital World, the SPAC merging with Truth Social's parent, are up more than 110% this year, bolstered by Trump supporters’ investments. The price dipped Friday after the merger was approved, ending the day down almost 14% at $36.94.