Shares of Trump Media have slumped to new lows on the first trading day that its biggest shareholder, former President Donald Trump, is free to sell his stake in the company behind the Truth Social platform
Shares of Trump Media & Technology Group slumped to their lowest level ever at the opening bell Friday, the first trading day that its biggest shareholder, former President Donald Trump, is free to sell his stake in the company behind the Truth Social platform.
Shares of Trump Media, commonly called TMTG, tumbled almost 7% to $13.73, putting the value of the company at less than $3 billion. Trump owns more than half of it.
Trump and other insiders in the company have been unable to cash in on the highly volatile stock due standard lock-up agreements that prevent big stakeholders from selling stakes for a set period after a company becomes publicly traded. TMTG began trading publicly in March.
Trump owns nearly 115 million shares of the company, according to filings with the Securities and Exchange Commission. Based on TMTG’s share price early Friday, Trump’s holdings are worth, at least on paper, about $1.6 billion. It’s usually not in the best interest of big stakeholders to even attempt to sell large tranches of their stock because it could risk a broader sell-off.
Since going public, shares in Trump Media have gyrated wildly, often depending on news related to Trump, the Republican presidential nominee.
One week ago, the company’s shares jumped nearly 12% after Trump said he wouldn’t sell shares when the lock-up period lifted. The stock dipped more than 10% following the debate earlier this month between Trump and the Democrats’ nominee, Vice President Kamala Harris. In mid-July, shares climbed more than 31% in the first day of trading following the first assassination attempt on Trump.
Trump Media & Technology Group Corp. is now worth considerably less than several months ago. When the company made its debut on the Nasdaq in March, shares hit a high of $79.38.
Truth Social came into existence after he was banned from Twitter and Facebook following the Jan. 6, 2021, Capitol riot. Based in Sarasota, Florida, Trump Media has been losing money and struggling to raise revenue. It lost nearly $58.2 million last year while generating only $4.1 million in revenue, according to regulatory filings.
Former President Donald Trump’s much-anticipated media venture, the Trump Media & Technology Group, experienced a significant decline on its first day of share sale availability. The company, which was founded by Trump in an effort to create a conservative alternative to mainstream media outlets, saw its stock price drop by over 20% within hours of trading.
The decline in the company’s stock price comes as a surprise to many, as there was much hype and anticipation surrounding the launch of the Trump Media & Technology Group. The company had been touting itself as a disruptor in the media industry, promising to provide a platform for conservative voices that have been marginalized by traditional media outlets.
However, it seems that investors were not as enthusiastic about the company as Trump had hoped. The sharp decline in the company’s stock price on its first day of trading is a clear indication that there are concerns about the company’s long-term viability and ability to compete in a crowded and competitive media landscape.
Some analysts have pointed to the lack of concrete details about the company’s business model and strategy as a reason for the decline in its stock price. While Trump has been vocal about his plans to launch a social media platform and streaming service under the Trump Media & Technology Group umbrella, there is still much uncertainty about how these ventures will be monetized and whether they will be able to attract a large enough audience to be successful.
In addition, there are questions about the company’s leadership and management team. Trump himself has faced numerous legal challenges and controversies since leaving office, which could potentially impact the company’s reputation and credibility. Investors may be wary of getting involved with a company that is so closely tied to a controversial figure like Trump.
Despite the rocky start, it remains to be seen whether the Trump Media & Technology Group will be able to turn things around and regain investor confidence. The company still has a long way to go before it can establish itself as a major player in the media industry, and it will need to address the concerns that have led to the decline in its stock price if it hopes to succeed in the long run.
