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Donald Trump’s media company drops 12% and extends sell-off

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Donald Trump's media company drops 12% and extends sell-off

(Reuters) – Shares of Donald Trump’s media and technology company fell as much as 12% on Monday, extending a sell-off that has now reduced the value of his stake in operator Truth Social to $2.9 billion.

After its strong debut in late March, investors are disappointed with Trump Media & Technology Group after the company announced millions of dollars in losses earlier this month and said it would struggle to meet its financial obligations.

The company’s shares closed 8.4% lower at $37.17 on Monday, far from the record high of $79 it reached in its March 26 debut. It’s down about 40% so far in April.

The declines reduce the potential windfall for Trump, who could sell his shares to raise money for his 2024 presidential campaign and legal costs, although lock-up restrictions for six months could prevent him from selling his shares or borrowing.

Former US President Trump – who owns about 78.75 million shares in the company – has seen a sharp drop in the valuation of his stake from around $6 billion last month.

The market value of the entire Trump Media & Technology Group is now below that figure, at about $5.55 billion.

But the declines are welcome news for short sellers who have suffered big losses on the stock so far this year.

According to analytics firm S3 Partners, Trump Media & Technology Group has a short interest of approximately 4.75 million shares, or 12% of the free float.

Monday’s drop meant those who bet on the stock made about $16 million in market-to-market profits, although those who shorted the stock are still down 69% this year.

“DJT’s recent price weakness has offset the huge financing costs incurred by short sellers and kept many of them in trading,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

(Reporting by Priyanka.G in Bengaluru; Editing by Maju Samuel)