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Trump Media, the parent company of Truth Social and majority-owned by former President Donald Trump, saw its stock price hit record lows on Tuesday. The decline comes as part of a broader market downturn, particularly affecting tech companies. However, investors also attribute the drop to the unique factors surrounding the company and its association with Trump.
DJT Stock Hits New Low
On Tuesday, shares of Trump Media, trading under the ticker symbol DJT, plunged to $17.89 during midday trading. This marks the lowest point since the company went public in March following its merger with a special purpose acquisition company (SPAC). The stock’s previous low was $19.38, set on August 28.
By the end of the trading day, DJT shares closed at $18.08, down over 7%. This represents a staggering 77% decline from its peak of $79.38 per share in March. The company’s market capitalization has plummeted nearly 70% since its debut on the Nasdaq.
Broader Market Impact
Tuesday’s market downturn was not limited to Trump Media. The Nasdaq Composite Index, which heavily features tech companies, fell by 3.26%. The Dow Jones Industrial Average and the S&P 500 also experienced declines of 1.51% and 2.12%, respectively. While these drops affected many companies, Trump Media’s stock appears to be influenced by factors beyond general market conditions.
Meme Stock Behavior
Unlike traditional stocks that move based on company performance and market trends, DJT has shown signs of behaving like a “meme stock.” Investors note that its price tends to fluctuate more in response to public sentiment toward Trump rather than the company’s financial results. For instance, when Trump survived an assassination attempt in July, the stock surged by 30% to $42 per share, although this was still far below its peak of $62.
Regulatory Filings and Investor Concerns
In recent regulatory filings, Trump Media acknowledged that the company’s success is partly tied to Trump’s personal brand and reputation. The filings also warned that adverse publicity or the loss of Trump’s involvement could negatively impact the company’s revenues and operations.
Trump currently owns approximately 59% of DJT’s outstanding shares. However, he and other major shareholders are restricted from selling their shares due to a “lockup agreement” that expires on September 25. This has led to speculation about whether Trump will sell his shares, a move that could net him over $2 billion but might also trigger a broader selloff.
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Legal Challenges and Market Reaction
Trump Media has faced significant legal challenges, including a drop in share price following Trump’s conviction in May on 34 counts of falsifying business records. The charges stem from an alleged affair with an adult film actress, which Trump has denied. Despite pleading not guilty, the stock tumbled nearly 40% in June. Trump’s sentencing is scheduled for September 18, adding further uncertainty for investors.
Allegations of Stock Manipulation
Amid the ongoing stock decline, Trump Media officials have pointed fingers at short sellers and alleged stock manipulators. They have called on authorities to investigate and prosecute any illegal activities that may be contributing to the stock’s slide.
Changes in Social Media Strategy
In June, Trump Media made an amendment to its registration statement, signaling a potential shift in Trump’s social media strategy. The amendment allows Trump to use other platforms besides Truth Social, after the former president gained millions of followers on TikTok. This move could further impact the company’s stock, as Truth Social has been a key asset for Trump Media.
Conclusion
Trump Media’s stock performance continues to be volatile, influenced by both market trends and the unique factors surrounding Trump’s brand and legal challenges. As the lockup agreement expiration date approaches and legal proceedings unfold, investors should brace for potential further fluctuations in DJT’s stock price. For now, the company remains at the center of financial and political scrutiny, with its future uncertain.
