Former President Donald Trump’s social media company, Trump Media & Technology Group, saw another decline in its stock price on Monday, dropping nearly 60% below its peak set late last month. The stock was down 16.8% at $27.10 in midday trading, indicating a significant loss of investor confidence. This sharp decline comes after the company’s initial surge following its merger with a shell company to begin trading on the Nasdaq under the symbol “DJT.”
One of the reasons for the decline in Trump Media’s stock price may be the criticism that it had been overvalued, considering the company’s financial struggles and uncertain prospects for success. Another factor contributing to the drop could be the company’s filing with the U.S. Securities and Exchange Commission, which opens the door for the potential sale of millions of shares. The filing includes warrants held by investors that can be converted into shares, as well as shares held by company insiders, including former President Trump, who is currently under a lock-up agreement that restricts him from selling his shares for another five months.
While the filing does not necessarily mean that investors are planning to sell their shares, it does raise concerns about the increased number of shares outstanding for Trump Media, potentially putting downward pressure on the stock price. This could negatively impact smaller investors who have shown support for the former president by buying shares of Truth Social, Trump Media’s social media platform. The drop in stock price also affects Trump’s personal finances, as he could own nearly 114.8 million shares in the company, which has significantly decreased in value since its peak.
Trump Media gained its spot on the Nasdaq through a merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC) that provided a quicker route for the company to go public. S-1 filings like the one submitted by Trump Media are typically made shortly after a SPAC deal closes and can lead to an increase in the number of shares available for trading, potentially causing a decline in price if demand does not match supply. The current state of Trump Media’s stock price reflects the challenges facing the company and its investors as they navigate the volatile market conditions.
Despite the setbacks in the stock price, Trump Media & Technology Group remains committed to its mission of providing a platform for conservative voices through Truth Social. The company’s leadership, including CEO Devin Nunes and board member Donald Trump Jr., continues to work towards establishing a strong presence in the social media landscape. As the company faces criticism and market fluctuations, its ability to deliver on its promises and attract users will be crucial in determining its long-term success. Trump’s legal challenges, including the hush-money trial that began in New York on Monday, add another layer of complexity to his business endeavors and personal finances.
