Trump Media stock soars, reversing weekslong decline in DJT share price

Trump Media stock soars, reversing weekslong decline in DJT share price

The logo of the social network Truth is seen in this photo illustration on December 4, 2023 in Warsaw, Poland.

Jaap Arriens | Photo only | Getty Images

Shares of Trump media rose as much as 30% on Monday as the company, majority owned by former President Donald Trump, tried to recover from a weeks-long slump that cut its stock price by nearly half.

Trump Media, which does business as DJT on Nasdaq, was trading at around $36 per share on much above-average volume as of 1:30 p.m. ET. The stock closed Friday at just over $27.

The gains are welcome news for the company behind Truth Social, whose stock price has fallen nearly 50% in the roughly three weeks since a New York jury found Trump guilty of 34 counts of falsifying business records.

Stock chart iconStock chart iconTrump Media stock soars, reversing weekslong decline in DJT share price

TMTG stock price

Trump Media shares fell even further last week after the registration of additional shares was declared effective by the Securities and Exchange Commission. The release threatened to dilute the share price due to the inclusion of further tradable shares in the company’s free float.

The registration allowed early investors to resell certain shares and exercise previously issued warrants. Stock warrants give their holder the opportunity to buy shares at a predetermined price within a certain period of time.

On Friday, Trump Media said it expected proceeds of more than $69.4 million from the warrants exercised on Thursday and Friday.

The company’s recent share price drop and sudden turnaround are just the latest example of the volatility that has characterized the first three months of public trading.

After completing a lengthy public merger with a special purpose acquisition company in March, the newly formed Trump Media shot up double digits in its whirlwind Nasdaq debut. However, after reaching a high of $79.38 per share, the stock quickly collapsed, falling to a share price of nearly $22.

Trump Media shares continued to swing dramatically up and down, even after the company reported a net loss of $327.6 million on revenue of just $770,500 in last month’s quarterly report.

Trump Media currently has a market cap of nearly $6 billion. Its value depends largely on the popularity of Trump, the headline-grabbing ex-president who is the presumptive Republican presidential nominee.

Trump posts almost exclusively on Truth Social, the microblogging social media platform that is Trump Media’s only product to date. But Trump joined social media giant TikTok in early June, whose traffic dwarfs that of Truth Social.

The company acknowledged in a recent regulatory filing that it “may lack meaningful remedies” if Trump decides to abandon Truth Social in the future.

Trump owns 114,750,000, or about 64.9%, of the company’s shares. He cannot sell any of his shares until the end of September, when a post-merger lock-up period expires.

This is developing news. Please check back for updates.

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2024-06-24 17:30:01