The price of Trump Media’s shares dropped to the lowest level since the merging of the social media company owned by Donald Trump over five months ago. The preferred social messaging app of the Republican former president, Truth Social, is owned by Trump Media, which saw its share price close more than 3.5% lower at $22.24 at the end of trading. Following its late March merger with publicly traded Digital World Acquisition Corp., the formerly privately owned company started trading on the Nasdaq under the ticker DJT, rising to a high of $79.38 per share. Although the stock price has remained fluctuating, it has lost almost half of its value since mid-July.
The Company’s Stock Decline
The company’s closing price on Monday is the lowest since it was still trading within the DWAC ticker on January 12. Trump, who owns the majority of Trump Media and is a significant attraction for Truth Social users, has had a series of seismic occurrences in the last four weeks, which have corresponded with the company’s stock decline. On 15th July, the 1st trading day following Trump’s near-assassination at a campaign event in western Pennsylvania, the share price shot up. Two days later, President Joe Biden, then the presumed Democratic nominee, was officially beaten by Trump, who now had even more momentum as the Republican nominee for president.
However, Trump’s expanding lead abruptly evaporated on July 21, when Biden withdrew from the race and endorsed Kamala Harris, the Vice President, to head their party’s ticket. The unprecedented shift changed the opinion of betting markets over the November winner. Trump is no longer preferred over Harris. According to Trump Media’s regulatory filings, Trump’s reputation and popularity play a significant role in the company’s performance. Some Trump fans appear to view the company’s shares as a means of endorsing the outgoing president or placing a wager on his potential for reelection.
Trump Cannot Sell Any Of His Stock
Trump Media said on August 9 that it had lost almost $16 million in the financial quarter that concluded on June 30 while only generating $837,000 in sales. About half of the company’s loss was ascribed to continuing legal costs associated with its merger with DWAC, a purported special purpose acquisition company, that was postponed for over two years after it was first announced. The company’s stock price has allowed it to maintain a market cap of about $4.5 billion despite its low revenue.
Nearly 59% of outstanding shares of Trump Media are owned by him; at Monday’s lunchtime market price, that ownership interest was valued at over $2.5 billion. However, he cannot sell any of his stock until September 25th, when a lockup period of six-months ends. Trump must first publish “non-political” social media content on Truth Social, as stipulated by a licensing agreement. However, he is unrestricted in his capacity to post political statements on any website, and he recently used this power by posting on TikTok and X, two massive social media platforms whose audiences are far smaller than Truth Social’s.
