Trump Media Stock Decline: A 69% Plunge Before Lockup Period Ends
The stock price of Trump Media & Technology Group Corp. (NASDAQ:DJT), once a high-flyer, has seen a dramatic 69% decline, wiping out billions in market value. This downturn comes at a critical time as the lockup period from its blank-check deal is about to expire. As insiders prepare to sell their shares, this could flood the market and add more pressure to an already sinking stock price. The focus keyword “Trump Media stock decline” highlights the severity of the situation.
From $10 Billion to $3.4 Billion: A Rapid Decline
Trump Media & Technology Group, valued at nearly $10 billion in May, has now plunged to just $3.4 billion. This rapid selloff accelerated in the past month, with shares declining in 22 of the last 27 trading sessions, shedding over 45% of their value. As the expiration of the lockup period approaches, insiders are expected to begin selling their holdings, potentially increasing the downward pressure on the stock.
This decline comes as Donald Trump, the Republican presidential candidate, returns to X, after previously using his own platform, Truth Social. However, this hasn’t been enough to stop the Trump Media stock decline, which has left investors wary.
Impact on Trump’s Personal Profits
For Donald Trump, the sharp decline in stock value has wiped out over $3.7 billion of his paper profits. Once nearing $5.8 billion, his current holdings are now valued at roughly $2 billion. This decline has not only affected Trump but has also resulted in significant gains for short sellers. According to data from S3 Partners, short sellers have gained more than $200 million since the stock’s peak in mid-July.
Trump Media stock decline, combined with volatile market conditions, highlights the challenges faced by special-purpose acquisition companies in maintaining value. Despite this, Trump’s media venture remains a focal point of political and financial speculation.
Insiders Set to Sell After Lockup Expiry
A crucial factor driving the Trump Media stock decline is the upcoming expiration of the lockup period, allowing insiders to sell their shares. As early as September 19, insiders may begin unloading their equity, creating a potential surplus of shares in an already saturated market.
Brian Quinn, a law professor at Boston College, commented on the situation, stating, “The current stock price has no connection to the company’s actual value.” Quinn’s remarks suggest that the stock’s value has been driven largely by political loyalty rather than the company’s performance. Trump Media’s valuation remains inflated despite reporting a loss of $16 million in Q2 2023, with less than $1 million in revenue.
Comparison to Bitcoin and Volatile Stocks
The volatility of Trump Media stock is stark, with its 30-day realized volatility reaching 70%. This figure surpasses even Bitcoin, known for its price swings, which has a 30-day volatility of 44%. Trump Media’s stock reached as high as $79.38 shortly after its debut but now trades around $17, an all-time low for the public company.
Such volatility adds to the challenges facing Trump Media, with the upcoming lockup expiration likely to worsen the stock’s already turbulent performance. Speculative investors, once bullish on the company, are now reconsidering their positions as the stock decline shows no sign of slowing down.
The Future of Trump Media & Technology Group
As Trump Media continues to struggle, its stock price may face further declines, especially as insiders begin to sell their shares following the lockup period. Trump’s return to X has not provided the boost some investors hoped for, and with weak financials, the company faces an uphill battle to regain its former value.
In the political landscape, Trump’s declining stock price has mirrored his fluctuating poll numbers. While his media venture once symbolized a lucrative investment opportunity tied to his popularity, the Trump Media stock decline may now reflect a broader skepticism among investors and supporters alike.
The road ahead for Trump Media remains uncertain, and with the upcoming election, the stock could continue to experience turbulence. Investors will be watching closely as Trump navigates both political and financial challenges in the months ahead.
Featured Image: Freepik
