The stock price of former President Donald Trump’s social media platform Truth Social made turbulent swings in the aftermath of his conviction in a New York court on Thursday.
A jury found Trump guilty of 34 felony counts of falsifying business records in an effort to conceal hush money payments made to porn star Stormy Daniels. The verdict made Trump the first president to be convicted in a criminal trial.
In the immediate aftermath of the verdict, the stock price of Truth Social plummeted roughly 15% to a price of about $47. The stock recovered in after-hours trading, however, rallying above its pre-verdict level to about $52.
As of early trading on Friday, the price was down about 5%.
While acknowledging an overall decline since the verdict, analysts offered an optimistic view of the stock performance because in their view the stock showed resilience after the initial drop.
“The fact that it reversed right back off of that and almost immediately made new highs above where it was the day before — that’s textbook bullish,” Tyler Richey, an analyst at Sevens Report Research, told ABC News.
The price movement since the verdict reflects a dynamic that bodes well for the stock going forward, Richey added.
“Die-hard Trump supporters may not care what the stock does — they just want to support Trump,” Richey said.
By contrast, opponents of Trump face the logistical barriers and financial risks involved with shorting the stock — an investing strategy that delivers returns when a stock drops and, in turn, places downward pressure on the price.
“You have an imbalance between supporters and opponents of Trump in what they can do in the markets,” Richey added.
The volatile performance since Thursday afternoon marks the latest in a series of dramatic price swings for the stock.
Shares vaulted from an initial offering price of about $50 to a peak of nearly $80 in late March. Over the ensuing two weeks, the price fell nearly 70%, reaching a low of about $23.
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As of Thursday morning, the stock had rebounded to a price of about $51 before plummeting in the aftermath of the verdict.
The stock performance holds significant financial implications for the former president, whose 60% stake in the company could ultimately deliver a multibillion dollar windfall. Truth Social shares make up a large portion of Trump’s overall net worth, according to Fortune.
Former President Donald Trump appears in court for his hush money trial at Manhattan Criminal Court on May 30, 2024 in New York City.
Steven Hirsch-Pool/Getty Images
Experts who previously spoke to ABC News described Truth Social as a so-called meme stock since it largely appeals to investors on the basis of ideology rather than financial outlook.
Truth Social generated roughly $3 million over the first nine months of 2023, government filings show. Meanwhile, the company reported $49 million in net losses over that period. By comparison, Instagram-parent Meta delivered nearly $135 billion in revenue last year, company earnings revealed.
The absence of financial underpinning leaves the stock vulnerable to major declines even in response to mildly negative or routine news, experts previously told ABC News.
A selloff in April coincided with financial challenges for Trump. Early that month, the presumptive Republican presidential nominee posted a $175 million bond in a New York civil fraud case.
“The only thing that you can predict is that there will continue to be volatility,” Jay Ritter, a professor of finance at the University of Florida, told ABC News.
The stock of former President Donald Trump’s social media platform, Truth Social, has experienced volatile fluctuations following a recent court decision. The platform, which was launched earlier this year as a conservative alternative to mainstream social media platforms, has been the subject of much scrutiny and controversy.
The court decision in question pertains to a lawsuit filed against Truth Social by a group of investors who claim they were misled about the company’s financial health and prospects. The lawsuit alleges that Truth Social made false and misleading statements about its user growth and revenue projections, leading investors to believe that the platform was more successful than it actually was.
Following the court decision, which ruled in favor of the investors, the stock of Truth Social has experienced significant fluctuations. The initial reaction to the news was a sharp drop in the stock price, as investors reacted to the uncertainty surrounding the platform’s future. However, in the days following the decision, the stock has seen some recovery as investors weigh the potential impact of the lawsuit on Truth Social’s long-term prospects.
The volatility in Truth Social’s stock price highlights the challenges facing the platform as it seeks to establish itself in a crowded and competitive social media landscape. With mainstream platforms like Facebook and Twitter dominating the market, Truth Social faces an uphill battle in attracting users and advertisers. The recent court decision only adds to the uncertainty surrounding the platform’s future, as investors question its credibility and viability.
Despite these challenges, Truth Social continues to attract attention from conservative users who are looking for an alternative to mainstream social media platforms. The platform has positioned itself as a champion of free speech and conservative values, drawing support from Trump supporters and other right-wing activists. However, its success will ultimately depend on its ability to attract a broader audience and compete with established players in the social media space.
As Truth Social navigates these challenges, investors will be closely watching its stock price for signs of stability and growth. The recent fluctuations following the court decision serve as a reminder of the risks and uncertainties facing the platform, as it seeks to carve out a niche in an increasingly competitive market. Only time will tell whether Truth Social can overcome these obstacles and establish itself as a viable alternative to mainstream social media platforms.
