Shares of Trump Media & Technology Group, the owner of social networking site Truth Social, slumped on Friday after former President Donald Trump was convicted in his hush money trial. The New York jury found Trump guilty of falsifying business records in a scheme to influence the 2016 election through hush money payments to a porn actor. This marks the end of Trump’s historic hush money trial, but the fight is far from over as Trump plans to hold a news conference at 11 a.m. ET. The sentencing is set for July 11, just days before Republicans are set to pick Trump as the 2024 nominee. While Trump may be convicted and reside in Florida, he can still vote as long as he stays out of prison in New York state, but it remains unclear whether this conviction will have any impact on voters.
The stock of Trump Media & Technology Group, which trades under the ticker symbol “DJT,” has been highly volatile since its debut in late March. Shares fell 9% in after-hours trading and were down 5% early Friday following news of Trump’s conviction. The stock has tripled this year, often making double-digit percentage moves either higher or lower on a single day. It peaked at nearly $80 in intraday trading on March 26, but has since experienced fluctuations in response to various events. Meme stocks, such as AMC Entertainment and GameStop, also fell early Friday, as did shares of social media companies, with Trump Media’s decline being at least double the decline of any stock in either sector before the opening bell.
Trump Media had previously reported a loss of over $300 million in the last quarter, citing non-cash expenses related to its merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC). The company posted a loss of $327.6 million for the three-month period that ended March 31. In a filing with the U.S. Securities & Exchange Commission before going public, Trump Media warned investors of the potential impact of legal proceedings involving Trump on the stock. This included the risk of adverse outcomes in ongoing legal proceedings negatively impacting the company and its Truth Social platform.
Trump Media & Technology Group also faced issues with its auditor this month, as federal regulators charged the firm with “massive fraud.” The media company fired BF Borgers, its independent public accounting firm, on May 3, delaying the filing of its quarterly earnings report. Trump was charged with 34 counts of falsifying business records related to a scheme to hide potentially embarrassing stories about him during the 2016 election campaign. The charges stemmed from reimbursement payments made to his lawyer, Michael Cohen, for a hush money payment to Stormy Daniels. Trump’s defense argued that the payments were for legitimate legal services, while the prosecution alleged they were tied to a hush money payment.
The impact of Trump’s conviction on the future of Trump Media & Technology Group and its social networking site Truth Social remains uncertain. The company’s stock has experienced extreme volatility since its debut, with significant fluctuations following news of Trump’s conviction and other related events. The loss reported by Trump Media in the last quarter, along with issues with its auditor, further add to the challenges faced by the company. As Trump plans to address the public in a news conference and await sentencing, the market will likely continue to closely monitor developments surrounding the former president and their implications for the company’s future performance.
