Trump’s media company loses a third of value after initial surge in trading
Donald Trump’s media and technology group, DJT, has lost about 36% of its value since it began publicly trading on 22 March, dropping the former president’s stake to about $2.8bn.
As of Monday afternoon, DJT stock was priced at about $36 – down from a high of $66 seen on 27 March. But market analysts are saying it’s too soon to draw any firm conclusions from the depreciation because the stock has become one of the most actively shorted on the Nasdaq exchange – meaning traders have been betting that it will fall.
And the value of Trump’s social media company now stands at where it was when Trump Media merged under a special-purpose acquisition company (Spac) deal with shell company DWAC earlier in March.
The value of DWAC, renamed DJT, initially soared over several days in its infancy as a publicly traded company, briefly boosting Trump’s fortune – on paper – to more than $6bn. But the company generates minuscule revenue ($4.1m last year) and no profit.
Some investors bought shares in DJT as way to show their support for Trump’s campaign for a second presidency in November, on which he has embarked despite facing more than 80 pending criminal charges for election subversion, retaining classified materials after leaving the Oval Office and hush-money payments.
He is also grappling with multimillion-dollar civil penalties for business practices deemed fraudulent and a rape allegation which a judge has determined to be substantially true.
But some are now selling DJT shares just as quickly.
Meanwhile, Trump himself has not been able to cash out. He is under a lockup agreement requiring him to wait six months – or until September – to sell his shares.
The company and some of its executives are already awash in legal claims. The transaction was approved despite a US Securities and Exchange Commission investigation of DWAC. And criminal charges have been filed against one DWAC executive accusing him of insider trading.
Two former contestants on Trump’s former reality TV series The Apprentice also sued, claiming that the expresident was planning to dilute their stakes in the company. Trump has counter-sued, arguing that they do not deserve their stakes.
Trump maintains that DJT’s Truth Social platform – set up to counter what he described as censorship across more established media – is bound to be successful. In a post on the platform, he called the company’s business “very solid”.
Truth Social’s chief executive officer, Devin Nunes, a former US congressman, also expressed confidence, noting that the company now has “no debt and over $200m in the bank, opening numerous possibilities for expanding and enhancing our platform”.
Nunes added: “We intend to take full advantage of these opportunities to make Truth Social the quintessential free-speech platform for the American people.”