Shares of Trump Media & Technology Group (NASDAQ:DJT), the parent company of Truth Social, have experienced continued volatility and downward trends after former President Donald Trump’s conviction on all 34 counts related to falsifying business records for the 2016 presidential campaign.
Following Trump’s conviction, DJT shares initially fluctuated in extended hours of trading before dropping approximately 6% shortly after the opening bell. Trump, expected to appeal the verdict, faces up to four years in prison on each count, with sentencing scheduled for July 11.
Trump Media, which went public on the Nasdaq through a merger with Digital World Acquisition Corp., has seen its stock fall by approximately 10% since its debut at the end of March. The company’s flagship platform, Truth Social, was established by Trump after he was banned from major social media platforms like Facebook and Twitter following the Jan. 6 Capitol riots in 2021.
Despite Trump’s reinstatement on mainstream social media platforms, he has remained active on Truth Social, particularly during his trial period. However, Trump Media’s financial performance has raised concerns, with reported sales of just over $4 million and net losses nearing $60 million for the full year ending Dec. 31. The company anticipates ongoing losses amidst profitability challenges.
First-quarter results further highlighted financial struggles, with losses amounting to $327 million, largely attributed to expenses related to the SPAC deal. Despite boasting over 621,000 shareholders, predominantly retail investors, Trump Media faces hurdles in achieving profitability.
Trump maintains a significant stake of roughly 60% in Truth Social, with current trading levels valuing Trump Media at around $6.5 billion, giving the former president a stake of approximately $3.9 billion. However, this represents a decline from the initial value of Trump’s stake post-public debut, which stood at over $4.5 billion.
While a late April milestone secured Trump an additional $1.2 billion, stakeholders remain subject to a six-month lockup period before any sale or transfer of shares, adding further uncertainty to DJT’s future trajectory.
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