Trump’s Truth Social slumps on share issue

DONALD TRUMP’S social media app suffered a $700m (£561m) hit yesterday after the company issued new shares in a bid to raise cash.

Shares in Trump Media & Technology Group (TMTG), the parent company of Truth Social, tumbled more than 15pc after it announced plans to offer up to 21.5m new shares.

The move, which threatens to devalue existing shareholders’ stakes, wiped more than $700m off the company’s market value.

TMTG enjoyed a surge in its value after listing in New York via a blankcheque deal last month, with Mr Trump’s followers snapping up shares as a way of supporting his 2024 re-election campaign.

But its market value has since tumbled by more than $5bn amid concerns about the political risks linked to the app’s founder, who set up Truth Social after being banned from Twitter in the wake of the Jan 6 attack at Capitol Hill.

The latest valuation hit came as Mr Trump attended court for the first day of his trial over claims he attempted to cover up a $130,000 hush-money payment to Stormy Daniels, an adult film actress, ahead of the 2016 election. It is the first time a US president has faced a criminal trial and is one of four criminal cases Mr Trump is facing as he campaigns to return to the White House.

In a filing yesterday, TMTG acknowledged that Mr Trump was facing “numerous legal proceedings” and that a negative outcome in one or more of these cases could adversely affect the company.

Investors have also baulked at Truth Social’s hefty losses. Earlier this month, TMTG revealed it lost $58m last year on revenues of just $4.1m.

The company also warned of a “substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due”.