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Why DJT Stock Keeps Falling

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Why DJT Stock Keeps Falling

Shares of Trump Media & Technology Group – Donald Trump’s eponymous social media company – plunged on Tuesday, as the stock price continued a long decline that began after the former president’s election campaign. guilty verdict on all 34 felonies in his criminal hush-money trial.

Trump Media, which trades under the vanity ticker “DJT,” is down 39% since May 30, when a New York jury found Trump guilty of falsifying company records.

On Tuesday, Trump Media closed 10% lower at $31.31. The sell-off came as Trump Media warned investors that it could not force its majority shareholder to favor Truth Social, the company’s flagship platform, and post there first.

Trump Media appears to be a risky proposition for investors. Volatility has become the hallmark of stocks. It has swung wildly from a high of $79.38 per share at the end of March 26 to a low of $22.84 on April 16.

The shrinking market cap of $5.5 billion is almost entirely due to the Trump brand and his loyal following, including retail investors who have shown their support for him by backing the stock.

Republican presidential candidate and former President Donald Trump joins community leaders for a roundtable discussion at 180 Church on June 15 in Detroit, Michigan.Republican presidential candidate and former President Donald Trump joins community leaders for a roundtable discussion at 180 Church on June 15 in Detroit, Michigan.

Republican presidential candidate and former President Donald Trump joins community leaders for a roundtable discussion at 180 Church on June 15 in Detroit, Michigan.

Trump joined TikTok in June, with millions of followers. A political action committee supporting Trump’s candidacy – Make America Great Again Inc. – opened a TikTok account in May.

“If TMTG disagrees with President Donald J. Trump regarding the scope of his obligation to use or first post on Truth Social, TMTG will be deprived of any meaningful resolution with respect to such disagreement – ​​which would have a material adverse effect could have on TMTG’s business and/or activities,” the company said in an amended registration statement.

Tuesday also marked the deadline for some Truth Media investors to start selling shares. In a filing with regulators in April, Trump Media said it planned to offer nearly 21.5 million shares of its common stock “upon exercise of warrants.” It must await regulatory approval. Trump’s lock-up period expires at the end of September, so he can start selling some of his shares.

The developments only add to the uncertainty that has surrounded Trump Media stock since it began trading in March following its merger with shell company Digital World Acquisition Corp.

In the battle for advertising money and attention with major social media companies such as Facebook, TikTok and YouTube, Trump Media is a far behind. It reported a first-quarter net loss of $327.6 million on revenue of less than $1 million.

Trump Media officials have blamed stock manipulation by “naked” short sellers for its woes.

Short sellers don’t actually own the shares, but borrow them and then sell them, betting that the shares will fall so they can buy back the shares at a lower price and keep the difference. Naked short selling involves betting that a stock will fall without borrowing or owning the stock. Such a practice may be illegal.

This article originally appeared on USA TODAY: DJT Stock Price Plummets: Why Trump Media Stock Prices Keep Falling