Shares of Donald Trump's Trump Media & Technology Group (TMTG) skyrocketed by as much as 59% on Tuesday during its Nasdaq debut, fueled by fervent support from the former U.S. president's backers. The surge potentially offers Trump a significant windfall as he grapples with mounting legal costs.

At its peak, TMTG's shares reached $79.38, propelling its market capitalization above $10 billion on an undiluted basis. This remarkable valuation comes despite the company reporting an operating loss of $10.6 million for the first nine months of 2023, with revenue totaling just $3.4 million.

Although the stock closed 16% higher at $57.99, valuing the company at nearly $8 billion, Trump's majority stake in TMTG remains around $6 billion, subject to lock-up restrictions for the next six months.

The stock market debut follows TMTG's merger with blank-check company Digital World Acquisition Corp, announced in 2021. Despite earlier setbacks and delays, both Digital World and the newly listed TMTG have surged almost 600% since the deal's announcement, solidifying TMTG's status as a notable meme stock driven by retail trader enthusiasm and social media buzz.

Thomas Hayes, chairman of Great Hill Capital, commented on the rich valuation relative to the company's fundamentals, attributing it more to the fervor of Trump's supporters than a reflection of the underlying business prospects.

Trump, embroiled in multiple legal battles, has been struggling to raise funds for his campaign and legal expenses. TMTG provides a platform for Trump's supporters to invest in his political resurgence, evident from Digital World Acquisition's shares nearly tripling in value this year.

The surge in TMTG's stock on Tuesday also inflicted losses on investors betting against the stock, with short sellers facing paper losses totaling $158 million this year, according to S3 Partners.

The merger deal will inject $300 million in cash into TMTG-owned social media platform Truth Social, launched in February 2022 to cater to users disenchanted with mainstream social media platforms. Despite its relatively modest user base compared to industry giants like X and Meta Platforms, Truth Social's valuation soared during Tuesday's rally, highlighting investor optimism about its potential growth trajectory.

However, uncertainties loom over Trump's future involvement with Truth Social, as he may divest his stake and cease management involvement based on the outcome of his presidential bid. Additionally, Digital World's merger agreement with Trump's company has attracted scrutiny from the U.S. Department of Justice, casting a shadow over the company's future prospects.