Former President Donald Trump’s return to X, the revamped platform once known as Twitter, caused a stir in the stock market as shares of Trump Media & Technology Group (DJT) tumbled on Monday. This development unfolded just hours before Trump’s much-anticipated conversation with Tesla CEO Elon Musk on the platform.
Here’s a breakdown of the key points surrounding the Trump Media & Technology Group stock plunge and the company’s recent financial performance:
- DJT Stock Plunge: Shares of DJT, the parent company of Trump’s social media platform Truth Social, dropped by as much as 7% to trade at approximately $24.50. Concurrently, other Trump-associated stocks like conservative video platform Rumble (RUM) also witnessed share declines, with Rumble stock registering a more than 4% fall.
- Second Quarter Financials: DJT disclosed its second-quarter results last Friday, reporting a net loss of $16.4 million, of which around half was attributed to expenses associated with its SPAC deal. The company’s revenue for the quarter ending June 30 stood at just under $837,000, reflecting a 30% year-over-year decrease.
- Ongoing Financial Challenges: A regulatory filing from April revealed that Trump Media generated sales slightly exceeding $4 million, leading to a significant net loss of nearly $60 million for the full year ending December 31. The company anticipates continued losses amid mounting profitability hurdles.
- Stock Volatility: DJT shares have experienced fluctuations, with a significant pop (and subsequent drop) following President Joe Biden’s stumble in the first 2024 presidential debate with Trump last June. Since Biden exited the race a month later, DJT shares have faced downward pressure, particularly with Vice President Kamala Harris surpassing Trump in the latest polls.
This series of events emphasizes the financial turbulence DJT has navigated, underlining the company’s enduring struggle to achieve sustained profitability.
Since founding Truth Social in response to being banned from major social media platforms like Facebook and Twitter post-Capitol riots in 2021, Trump maintains a sizable stake in DJT β roughly 60%. At the current share price of around $25, Trump Media commands a market cap of approximately $3.39 billion, endowing the former president with a stake valued at roughly $2 billion. Notably, Trump’s stake was initially valued at over $4.5 billion following the company’s public debut, marking a significant financial shift.
While late April witnessed a milestone that secured Trump an additional $1.2 billion in cash, stakeholders are bound by a six-month lockup period before selling or transferring shares, marking a period of financial commitment and restraint.
In conclusion, the trajectory of Trump Media & Technology Group’s stock and financial performance underscores the company’s challenges and underscores the unpredictable nature of the markets amid shifting political and social landscapes. As investors navigate this evolving landscape, staying informed and attuned to market dynamics remains crucial for informed decision-making and portfolio management.
By Alexandra Canal
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