Former President Donald Trump’s media company, Trump Media & Technology Group, has faced a rough reception on Wall Street after a short-lived honeymoon period. The company’s stock, which trades under the ticker DJT, plummeted 18.4% in Monday trading following a 21% drop last week. This decline is attributed to the filing of a document with the SEC that allows for the potential sale of millions of shares in the future. Trump, along with his son Donald Trump Jr. and CEO Devin Nunes, are under a lockup deal that restricts them from selling their shares for approximately five more months.
The sharp drop in Trump Media’s stock price has resulted in a significant loss for Trump on paper. The shares initially surged when they began trading on March 26, giving Trump’s 57% ownership a value of $6.25 billion. However, after the recent slump, the stake is now worth $2.1 billion, representing a paper loss of $4.15 billion. Overall, shareholders have lost $7.2 billion in value since the stock’s high of $79.38 on March 26, with the shares falling to $26.61 on Monday.
When companies issue additional shares, there is a risk of downward pressure on their stock price due to increased supply and demand dynamics. Trump Media’s investor base consists largely of the former president’s supporters, with many expressing confidence that the stock will recover. While some investors are taking advantage of the stock’s plunge to purchase more shares, others are holding on to their investments in anticipation of a rebound. Trump has not indicated any intention to sell his shares, despite the recent filing pertaining to stock warrants.
Approximately 600,000 retail investors have bought shares in Trump Media & Technology Group, with 200,000 of them acquiring the stock within the last few weeks. CEO Nunes has praised these small investors for their support of the company, calling them the most remarkable aspect of their business. Since trading under the DJT ticker began on March 26, the stock has experienced significant fluctuations, drawing comparisons to meme stocks like GameStop that attract individual investors based on social media hype rather than traditional financial metrics.
Trump Media reported a loss of $58 million on revenue of $4.1 million last year, a fraction of the sales generated by a single Chick-fil-A location. Despite facing challenges on Wall Street and in terms of financial performance, Trump Media continues to attract attention due to its association with the former president and the ongoing developments surrounding Truth Social, its primary social media platform. The future trajectory of the company remains uncertain as investors navigate the volatile stock market landscape.
