Shares of Trump Media, trading under the ticker DJT, have recently seen their gains wiped out, with the stock dropping from a high of $66 to about $36. This movement is largely due to short-selling, where about 12% of the available shares are in traders’ bets that the stock will fall. Investors are positioning their bets around whether the stock will continue to decline or whether a rise may occur. Former President Donald Trump, who owns a majority of the company’s shares, has seen his net worth drop from $5.2 billion to $2.9 billion in tandem with the stock’s movements, but is unable to sell or borrow against his shares for six months. Despite this, Trump has expressed confidence in the company’s future, calling the business “very solid” and refuting criticisms of its reach.
Trump Media reported a loss of $58.2 million last year and did not disclose any user metrics. The company’s auditor issued a “going concern” notice, casting doubt on its ability to survive. Furthermore, the auditor, BF Borgers CPA PC, has faced scrutiny for its effectiveness and is banned in Canada. CEO Devin Nunes, a former U.S. congressman, remains optimistic about the company’s future, noting that Truth Social has no debt and over $200 million in the bank post-merger. Nunes expressed excitement about the company’s access to capital markets and plans to enhance and expand the platform, positioning Truth Social as a leading free-speech platform for Americans.
As the stock price continues to fluctuate, investors are closely monitoring the situation, with some aiming to profit from further declines and others looking to squeeze short positions by expecting a rise in the share price. This uncertainty has led to speculation and cautious reactions to the stock’s movement, creating a tense dynamic reminiscent of a standoff. Despite the challenges faced by Trump Media, the company remains committed to its vision of providing a platform for free speech and is focused on leveraging its strong financial position to grow and improve its services. With access to capital markets and a significant cash reserve, Truth Social aims to solidify its position as a key player in the social media landscape, catering to the needs of the American people.
