The price of Trump Media shares dropped to the lowest level since the merging of Donald Trump’s social media business over five months ago.
Truth Social, the Republican former president’s preferred social message network, is owned by Trump Media, which saw a loss of more than 3.5% in share price by the end of the trading day.
Following its late March merger with publicly traded Digital World Acquisition Corp., the formerly privately owned company started trading on the Nasdaq under the ticker DJT, rising to a high of $79.38 per share. Although the stock price has remained fluctuating, it has lost almost half of its value since mid-July.
The company’s closing price on Monday is the lowest since it was still trading under the DWAC ticker on January 12.
Trump, who owns the majority of Trump Media and is a big attraction for Truth Social users, has had a series of seismic occurrences throughout the last four weeks, which have corresponded with the stock decline of Trump Media.
On July 15, the first trading day following Trump’s near-assassination at a campaign event in western Pennsylvania, the share price shot up.
Two days later, President Joe Biden—then the presumed Democratic nominee—was officially beaten by Trump, who now had even more momentum as the Republican nominee for president.
However, on July 21, Biden withdrew from the election and endorsed Vice President Kamala Harris to lead their party’s ticket, abruptly cutting into Trump’s previously commanding lead.
The unprecedented shift changed the opinion of betting markets over the November winner. Trump is no longer preferred over Harris.
According to Trump Media’s regulatory filings, Trump’s reputation and popularity play a significant role in the company’s performance.
Some Trump fans appear to view the company’s shares as a means of endorsing the outgoing president or placing a wager on his potential for reelection.
On August 9, Trump Media said that it had lost over $16 million during the fiscal quarter that concluded on June 30. However, the company had only brought in $837,000 during that same time frame.
The company ascribed nearly half of its loss to continuing legal costs associated with their announcement of a merger with DWAC, a purported special purpose acquisition company, which was postponed for over two years.
Due to its stock price, the company today has a market capitalization of around $4.5 billion despite its little revenue.
With over 59% of Trump Media’s outstanding shares under his ownership, as of Monday’s midday market price, his holding is valued at over $2.5 billion.
However, he cannot sell any of his stock until September 25th, when a six-month lockup period ends. When he has the chance, it’s unclear if Trump intends to sell any of this interest.
According to the terms of the licensing deal, Trump must publish “non-political” social media content on Truth Social before using it elsewhere.
However, he is unrestricted in his capacity to post political statements on any website, and he recently used this power by posting on TikTok and X, two massive social media platforms whose audiences are far smaller than Truth Social’s.
Elon Musk, the CEO of Tesla, conducted a live interview with Trump on August 12 on the social media platform X, which Musk owns.
Since the interview, Trump has made random posts on X.
