Shares of Trump Media have seen a significant surge in value, rising nearly 19% on Tuesday alone. This marks the company’s fourth consecutive day of gains, bringing its stock price to $21.80 per share. Despite this positive trend, the stock price is still considerably lower than its peak in March when it reached $79.38 per share. The surge in stock price comes amidst heavy trading volume, with over 45 million shares exchanged on Tuesday, more than triple the 30-day average volume.
The rally in Trump Media’s stock price has been accelerating since the weekend, when former President Donald Trump held a presidential campaign rally near Butler, Pennsylvania. The rally drew thousands of supporters and received an endorsement from Tesla CEO Elon Musk, who emphasized the importance of Trump winning the election. This rally took place at the same site where Trump had previously been the target of an assassination attempt in July. Despite the positive momentum in the stock price, concerns have been raised about the company’s well-being following the resignation of its chief operating officer, Andrew Northwall, in late September. The departure of other key employees has also been reported, raising questions about the company’s leadership and stability.
In addition to the executive departures, Trump Media also faced legal challenges related to a breach of stock agreements with early investors, including ARC Global Investments II. As a result of a judge’s ruling, the company had to transfer nearly 800,000 shares of common stock to ARC Global. This legal dispute added to the uncertainty surrounding the company’s future. Furthermore, the company’s financial performance has been lackluster, with net losses exceeding $340 million on revenue of less than $2 million in recent quarterly reports. Despite these challenges, Trump Media boasts a market capitalization of over $4 billion, fueled in part by retail investors who see the company as a way to support Trump or bet on his chances of winning the upcoming election.
Donald Trump himself is the majority owner of Trump Media, holding nearly 57% of the company’s shares, which are valued at almost $2.5 billion. Despite the company’s financial struggles, Trump has expressed his commitment to not sell his shares. The Truth Social platform operated by Trump Media has struggled to attract a large audience compared to established social media giants such as X and Facebook. However, the company’s stock price rally has generated interest among investors who see it as an opportunity to back Trump politically or speculate on the outcome of the election. The future of Trump Media remains uncertain, as it navigates challenges related to leadership turnover, legal disputes, and financial performance. Investors will be closely watching to see how the company addresses these issues and whether it can sustain its recent stock price momentum.
