Trump Media & Technology Group (DJT) stock took a nosedive on Monday, sinking 18% to close at $26.61 after the parent company of Donald Trump’s social media platform Truth Social filed to issue more than 21 million shares. This latest drop comes on the heels of last week’s sell-off, highlighting the shares’ volatility since Trump Media went public after merging with Digital World Acquisition Corp in late March.
The company’s stock plummeted more than 20% in a single day last week after an updated regulatory filing revealed heavy losses and increased risks associated with the former president’s ties to the platform. Trump Media disclosed that over 21.4 million shares are issuable through warrants stemming from the merger with Digital World, with more than 114 million shares held by former President Donald Trump.
Despite reporting sales of just over $4 million and net losses nearing $60 million for the full year ending Dec. 31, Trump Media warned of ongoing losses and profitability challenges in the future. The company emphasized its reliance on the reputation and popularity of Donald Trump, with Truth Social amassing approximately 9 million users since its inception.
However, Trump Media acknowledged the unique risks it faces as a social media platform associated with the former president, including potential advertiser harassment and criticism of moderation practices. The company stated that the value of its brand could diminish if Trump’s popularity were to decline.
Former President Trump launched Truth Social after being banned from major social media platforms like Facebook and Twitter following the Jan. 6 Capitol riots in 2021. While the stock initially soared to $66.22 per share on March 27, it has since tumbled to just above $27 per share on Monday.
The future of Trump Media & Technology Group remains uncertain as it navigates the challenges of expanding its user base and attracting advertisers while balancing the risks associated with its ties to Donald Trump. Stay tuned for further developments in this evolving story.
