After a brief honeymoon, former President Donald Trump’s media company has been met with a dire reaction on Wall Street. Trump Media & Technology Group, which trades under the ticker DJT, his initials, fell 18.4% in Monday trading, following a 21% plunge last week.
The sharp drop in value came after Trump Media, whose main asset is the social media platform Truth Social, filed a complaint on Monday. document The agreement with the U.S. Securities and Exchange Commission opens the door to the potential sale of millions of shares in the future. The document, known as an S-1, pertains to warrants held by investors that can be converted into stock, as well as shares held by company insiders.
The filing also includes all shares held by the former president. However, President Trump remains under a “lockup” agreement. he is severely restricted from selling His stock will remain in place for about five more months. Trump’s son and board member Donald Trump Jr. and CEO Devin Nunes will also be held in lock-up.
The plunging stock price wiped billions from Trump’s stock, at least on paper. The stock soared when trading began on March 26, and Trump’s 57% ownership stake was worth $6.25 billion. However, following DJT’s recent downturn, its shares are now worth $2.1 billion, which equates to a paper loss of $4.15 billion.
Overall, shareholders have lost $7.2 billion in value since the stock hit a high of $79.38 on March 26th. Shares fell $5.98, or 18.4%, to $26.61 on Monday.
When a company issues additional shares, it risks a decline in its stock price. One reason for this is the simple law of supply and demand. As available inventory increases, a company’s stock price tends to fall unless there is a commensurate increase in demand.
So far, supporters of the former president have made up a significant portion of the company’s investor base, including Trump Media CEO Nunes. praise They were supported on Fox Business earlier this month. Truth Social said some investors believed the stock price would recover, while others were taking advantage of the plunge to buy more shares.
“Like many of you, I bought more today,” one member of the Truth Social group specializing in DJT stock wrote on Monday. “I believe time is on our side. There are six months left until the election. We will definitely hold out until at least then.”
Other supporters of Truth Social pointed out that Monday’s filing does not necessarily mean Trump plans to sell his 57% stake in Trump Media.
“Trump has not indicated any intention to sell his stock,” pastor and musician Chad Nedohin wrote on Truth Social on Monday. “There will be no unexpected new issuance of new shares. The increase in total S-1 shares is due to stock acquisition rights.”
Christy Marvin, founder of SPACInsider.com, which specializes in SPAC transactions, said S-1 filings are typically filed soon after a SPAC transaction is completed, typically within 15 to 30 days.
Trump Media & Technology Group did not respond to requests for comment.
200,000 new individual investors
Trump relies on Truth Social as his main social media platform, where he has about 7 million followers and frequently slams his critics and touts favorable polls. He also criticized his own criminal trial, which began Monday, on charges of falsifying business records in connection with a case, to Truth Social. Payment of “hush money”.
About 600,000 retail investors have bought Trump Media & Technology Group stock, about 200,000 of them in the past few weeks, Nunes told FOX Business earlier this month. Ta. He called these small investors “the most amazing part of our company.”
These investors have been on a hot ride since the company’s stock began trading as DJT on March 26th. The stock soared in the first two days of trading, but has since lost more than two-thirds of its value.
Such fluctuations are called “Meme” stocks Companies like GameStop typically attract retail investors based on social media buzz, rather than traditional metrics favored by investors such as revenue or profit growth.
Last year, Trump Media lost $58 million on revenue of $4.1 million, about half of the annual revenue recorded by Single Media. Chick-fil-A location.
–From a report by the Associated Press.
