On Tuesday, Wall Street witnessed the debut of a new high-flying stock that garnered significant attention from investors. The largest shareholder? None other than former President Donald J. Trump.

Trump Media & Technology Group, the parent company of Truth Social, President Trump’s primary platform for engaging with supporters and critics alike, commenced trading on the Nasdaq under the ticker symbol DJT. Almost immediately, the stock surged by 40 percent during early trading hours, indicating a robust investor interest in the company’s potential.

The merger between Trump Media and a cash-rich public shell company, Digital World Acquisition Corporation, marked a pivotal moment for the former president’s media venture. This merger, which concluded on Monday, propelled Trump Media’s estimated market value well beyond $6 billion, eclipsing established corporations like Alaska Airlines, Western Union, and American Eagle Outfitters.

The substantial beneficiary of this market fervor is Mr. Trump himself, who commands approximately 60 percent ownership of Trump Media’s shares, valuing his stake at over $4 billion.

However, Trump Media’s astronomical valuation raises eyebrows among industry observers. With reported revenue of just $3.3 million in the first nine months of the previous year, solely from advertising on Truth Social, and a recorded loss of $49 million, the company’s market value stands at over 1,000 times its estimated annual revenue. Such a valuation is significantly higher than other social media platforms like Reddit, Meta, and Snap, as well as tech giants like Nvidia and ARM.

Notably, the surge in Trump Media’s stock mirrors the trading patterns of so-called meme stocks like GameStop and AMC Entertainment, which experienced exponential growth driven by retail investors during the pandemic.

The merger with Digital World, structured as a special purpose acquisition company (SPAC), underscores the evolving landscape of capital markets. SPACs serve the sole purpose of raising funds from investors to merge with operating businesses, thereby creating publicly traded entities.

Despite initial concerns regarding Mr. Trump’s need to raise substantial funds to cover a civil fraud penalty, an appellate court decision reduced the required amount and extended the deadline, alleviating immediate pressure on him to leverage his Trump Media wealth. Nonetheless, the board retains the authority to amend restrictions on share sales, a move that could potentially impact the stock’s performance.

While Mr. Trump no longer chairs Trump Media, his influence over the company remains palpable, with loyalists filling key positions on the board. The board’s primary challenge lies in devising a strategy to bolster the company’s business and expand the reach of Truth Social, ensuring its long-term viability amidst heightened investor and regulatory scrutiny.

As a public company, Trump Media faces heightened transparency requirements, including regular financial disclosures and detailed reporting on deals involving Mr. Trump. Such scrutiny could expose the company to legal risks, with shareholders empowered to challenge any perceived discrepancies in its statements.

In essence, Trump Media’s foray into public trading signifies not only a financial milestone for the company but also a test of its ability to navigate the complexities of the media landscape under intense public and regulatory scrutiny.