Shares of Trump Media & Technology Group (DJT) have seen a significant drop, falling over 6% on Monday, marking their lowest trading point since the company’s public debut in March. This decline comes after the expiration of the lockup period that restricted key stakeholders, including former President Donald Trump, from selling or transferring shares. This lockup period, which lasted for six months, officially ended last week. Despite the expiration, Trump has confirmed he has no intention of selling his shares, asserting, “I have absolutely no intention of selling… I love it. I use it as a method of getting out my word.”
The lockup period is designed to maintain stability for newly public companies, preventing large-scale sell-offs that could impact stock prices. Trump expressed his understanding of how selling his shares might alter public perception of the company, noting that his stake has indeed been diminished in recent months.
Since the conclusion of the lockup last Thursday, the stock has plummeted approximately 15%, a stark contrast to its peak of over $79 per share. Trump’s ownership remains substantial at about 60%, giving him a stake valued around $1.5 billion at current market levels, a substantial drop from the initial valuation of over $4.5 billion post-IPO.
The journey for Trump Media has been volatile since it merged with Digital World Acquisition Corp and went public on Nasdaq. This rollercoaster ride was exacerbated by significant media events, such as recent presidential debates and the political climate, which have led to fluctuating investor sentiment.
Following Joe Biden’s stumble during a crucial presidential debate, DJT’s stock witnessed a brief surge, only to face renewed pressure as Biden later withdrew from the 2024 presidential race. The ongoing competition from Vice President Kamala Harris in the latest polls has further contributed to the stock’s decline.
In addition to market pressures, Trump’s recent legal challenges have raised eyebrows among investors. He was found guilty on multiple counts related to business record falsification, influencing stock behavior, including a notable drop of 5% immediately after the verdict. As Trump awaits sentencing on these charges, which has been postponed until later this year, the uncertainty persists.
Within the last month, DJT disclosed its second-quarter results, revealing a net loss of $16.4 million and a dramatic revenue drop to under $837,000, reflecting the challenges the company faces in solidifying its foothold in the crowded social media landscape. With the foundational elements of the company under scrutiny, it remains to be seen how it will compete against established platforms like Facebook and Twitter, especially after Trump’s return to these networks in mid-August.
As the market continues to react to political developments and corporate performance, the future of Trump Media & Technology Group remains a topic of intense interest for investors and analysts alike.