Trump Media and Technology Group (NASDAQ: DJT) is now falling to almost the lowest point since it went public in March via a special purpose acquisition company (SPAC) merger.
DJT closed down over 6% at $16.14 per share on Tuesday and was 27% down in the previous month, despite the majority owner and Trump himself stating he has no intention to sell his shares which comprise 60% of the company – his announcement resulted in a 25% short-term boost to the stock, but now it projects downward.
Equity analysts explained that, for a company that went public via SPAC as Trump Media did, it is quite common to see a high trade volume of stocks, although they were traded mostly by individual investors as opposed to investment firms. Therefore, banks would not be making any significant amount of money in covering the stock.
Trump would be gaining a considerable amount should he sell his shares – amounting to over USD 2 billion even with the recent devaluation. Nevertheless, selling off a large amount of DJT would likely agitate investors and cause Trump Media shares to plummet further.
Trump, meanwhile, asserted he will not sell his holdings but it is possible that he may consider selling a few while maintaining a secure majority in the company. Provided Trump’s history of last-minute second thoughts, some investors would likely hedge their wager and sell some of their shares.
On the other hand, ARC Global Investments II and United Atlantic Ventures have announced their plans to sell 18 million shares on September 19, while Trump Media tried to prevent such through legal challenges though its motion was denied in August.
Andy Litinsky and Wes Moss, co-founders of Truth Social, both owning shares in Trump Media without any particular role in the company, also have had legal skirmishes with the company – both accused Trump Media of deliberately preventing them from selling their shares comprising 8% stake at times.
If Trump wins the election, it is speculated that he would continue using the Truth platform to make announcements which will in turn attract more users. If he loses, the platform would still remain his vocal outlet to oppose Harris. Either case, more subscribers would definitely mean better chances for advertising revenues, as well as higher stock price.
Regardless, the company’s financial position does not seem to be the main driver of DJT’s price – the company reported its total revenue of merely USD 836,900 with a net loss of over USD 16 million in June, and finished the last quarter with USD 344 million in cash and cash equivalents with no debt. Many investors remained firm and nicknamed the DJT a “belief stock” powered mainly by the personality behind it.
