The price of Trump Media shares has fallen to below $30 in early trading on Friday, which is more than $40 lower than its initial selling price when the company first went public on March 26. This drop comes after a series of declines, including a 5.4% drop on Thursday and an 8.5% decline on Wednesday. Trump Media, the owner of the Truth Social app, has seen its shares drop by over 47% this month, resulting in billions of dollars being wiped out from the company’s market capitalization. Former President Donald Trump is the largest shareholder in the company, owning nearly 60% of its stock.
Trump Media opened its first day of trading with a price of $70.90 per share on March 26, reaching a high of nearly $80 on the same day. The company’s market capitalization exceeded $9.5 billion during trading. However, by Friday morning, the market cap had dropped to $4.3 billion after shares experienced a significant price decrease. Trump Media merged with a publicly traded shell company, Digital World Acquisition Corp., in order to go public. The company reported revenue of $4.1 million and a net loss of $58 million in the previous year, attracting attention from short sellers who bet on a company’s share price decline.
As of this week, the short interest in Trump Media, known as DJT, was $208.7 million, with 5.44 million shares shorted. Trump Media has 136.7 million outstanding shares, and traders in the past had to pay up to 900% in annual financing costs to short the company’s shares. However, financing costs for short trades in Trump Media have recently fallen to 200%. Trump Media was launched after the ban of Donald Trump from Twitter following the Capitol riot on January 6, 2021. The former president frequently posts on the Truth Social app, using it to condemn various criminal cases and lawsuits he faces.
Trump this week hosted a celebration at his Mar-a-Lago club in Palm Beach, Florida, to mark the success of Trump Media. Trump praised Truth Social for its strength and dedication, highlighting that the company has no debt and over $200 million in cash. The CEO of Trump Media is former Republican congressman Devin Nunes. The company has faced financial challenges and a decline in share price, leading to speculation from investors and short sellers. Trump continues to leverage Truth Social to communicate with his supporters and address legal issues he is facing.
The future of Trump Media remains uncertain as the company navigates financial obstacles and shareholder concerns. The decline in share price and market capitalization have raised questions about the company’s long-term viability and performance. Trump’s involvement in the company as its largest shareholder adds a layer of complexity to its operations and future prospects. Investors and analysts will closely monitor Trump Media’s financial health and performance in the coming months to assess its sustainability and potential for growth in the competitive social media landscape.
