Critics have accused New York Attorney General Letitia James of using a civil fraud lawsuit to try and bankrupt former President Donald Trump.

However, that task got a lot harder this week after the former president managed to secure a major financial win. 

Shares in social media company spike

According to Reuters, shares in Trump Media & Technology Group (TMTG) jumped by as much as 59% following its Tuesday debut on the NASDAQ exchange.

TMTG, which owns the social media platform Truth Social, went public when stockholders in a shell company known as Digital World Acquisition Corp. (DWAC) voted last week to merge with it.

Fox Business noted that TMTG's upward trajectory came in the wake of two major legal victories for Trump on Monday.

In addition to blocking James from seizing his assets, a New York appeals court also reduced the former president's appeal bond from $454 million to $175 million.

Financial experts caution investors

Financial experts like Great Hill Capital chairman Thomas Hayes have advised caution, telling Reuters that Trump Media's "valuation of the business is rich relative to its underlying fundamentals, but I would not get in front of it in the near term."

"This valuation may be more of a proxy on the enthusiasm of supporters for Trump than a reasonable estimate of underlying business prospects," he added.

Nicholas Wealth Management president and found David Nicholas sounded a similar note when speaking with Fox Business host Stuart Varney on Tuesday.

The American people are buying my Truth Social merger $DJT to send this message to Washington and Big Tech. My net worth has increased $3 billion since the stock has gone up over 60%. Good luck draining my financials now Letitia. pic.twitter.com/RiFXqyLabU

— Donald J. Trump (Parody) (@realDonParody) March 26, 2024

"I think the run-up to the election is going to provide a lot of hype for Truth Social," Nicholas told Varney before adding the company could become profitable if Trump should win in November.

Continuation of meme stock phenomenon

He went on to recall the meme stock frenzy in which investors suddenly drove up the value of distressed companies such as AMC and GameStop.

"What you had, and this is very similar, was individuals and shareholders, they were buying these stocks, not because they wanted to make a profit, but because they wanted to send a message," Nicholas explained.

"So what I think we'll see in the short term, I think you'll see people buying Truth Social or DJT because they want to send a message to Washington," he continued.