Shares of Trump Media & Technology Group (DJT) plummeted by over 10% on Monday, reaching their lowest value since the company made its public debut earlier this year. The noticeable decline occurred shortly after the expiration of DJT’s lockup period last week, a crucial timeframe that kept major stakeholders, including former President Donald Trump, from selling or transferring their shares. Although this six-month restriction has now lifted, Trump remains adamant that he does not plan to divest his stake.
During a recent press conference, Trump stated, “I have absolutely no intention of selling. I love it. I use it as a method of getting my message out.” This conviction reflects his commitment to the platform despite seeing his share value decrease.
The primary goal of a lockup period is to maintain market stability for newly public companies by preventing significant sell-offs that could destabilize their stock prices. Trump expressed an understanding of the potential impact that selling his shares might have, noting, “If I sell, it wouldn’t be the same, and I can understand that.”
Since the expiration of the lockup, DJT’s stock has witnessed a sharp decline of around 20%. Previously, the stock traded at a record high of over $79 a share. Presently, the market capitalization of Trump Media stands around $2.5 billion, with Trump’s ownership roughly estimated at $1.5 billion, a significant drop from the valuation of over $4.5 billion right after the company’s launch.
Trump Media’s stock journey has been turbulent since its public arrival on the Nasdaq following a merger with Digital World Acquisition Corp. From highs to lows, the stock’s fluctuations have generally mirrored the unpredictable nature of the political news cycle. A notable spike in share prices was observed in June, correlating with a perceived misstep by current President Joe Biden during their first debate. This immediate gain, however, was short-lived.
Currently, DJT shares are under further pressure as polling indicates Vice President Kamala Harris, the Democratic presidential nominee, is leading against Trump. The 2024 presidential race has placed additional strain on the stock as public sentiment sways.
Moreover, Trump’s recent legal troubles have not gone unnoticed by investors. He was convicted of 34 counts of falsifying business records linked to the 2016 election, which caused a 5% drop in share price the day following the verdict. His sentencing has been postponed until November 26 of this year.
Since going public, DJT’s shares have nosedived approximately 65%, raising concerns about the company’s underlying financial health. In a recent financial report, Trump Media disclosed second-quarter losses of $16.4 million, with the majority attributed to costs associated with their SPAC arrangement. Total revenue for the period was under $837,000, representing a staggering 30% year-over-year decline.
Trump’s foray into social media comes after being banned from platforms like Facebook and Twitter (now known as X) following the January 6 Capitol riots. Despite being reinstated on these platforms, Trump continues to advocate for Truth Social as an alternative social media outlet. The company’s trajectory continues to be a hot topic, especially as it strives to carve out its niche in a market dominated by established competitors.
In these turbulent times, the future of Trump Media remains uncertain, fluctuating with the political climate and broader market dynamics. Investors are closely watching the developments, and the next few months could prove pivotal for the company and its controversial founder.