The price of Trump Media took a significant hit last week, closing trading down nearly 20% for the week. The company’s shares, which saw an initial drop of over 8% within the first hour of trading on Friday, managed to eke out a slight gain by the end of the day, closing up 18 cents at $32.59, an increase of around .5%.
This closing price was a stark contrast to the company’s initial public offering on March 26, where shares first sold for more than $38 higher. Trump Media, which owns the Truth Social app, has seen its shares plummet by 47.4% in April, wiping out billions of dollars in market capitalization.
Former President Donald Trump, the biggest shareholder in the company with nearly 60% of its stock, is facing a criminal trial in Manhattan Supreme Court on charges of falsifying business records related to a 2016 hush money payment to porn star Stormy Daniels. Despite these legal troubles, Trump Media opened its first day of trading with a price of $70.90 per share, reaching a high of nearly $80 later that same day.
However, by Friday’s close, the company’s market cap had dropped to $4.45 billion, a staggering $5 billion lower than its peak just over two weeks ago. Trump Media’s revenue last year was just $4.1 million, with a net loss of $58 million, making it a target for short sellers who bet on a company’s share price dropping.
As of this week, short interest in Trump Media was $208.7 million, with 5.44 million shares shorted. With fewer than 100,000 shares available to borrow for short selling, traders were facing high financing costs. However, these costs have since fallen, providing some relief for those betting against the company.
Overall, Trump Media’s turbulent week on the stock market reflects the challenges facing the company and its controversial figurehead, Donald Trump. Investors will be watching closely as the company navigates its legal troubles and attempts to regain its footing in the market.
