Trump Media Stock Slips as Trump Returns to X, Faces Financial Setbacks

Donald Trump, Former President and Businessman: “I don’t run a conventional company, and the stock market is not always a reflection of the true value of a business. My companies create jobs and build great things—that’s what matters.”

Trump Media & Technology Group (DJT), the parent company of Truth Social, saw its stock take a hit on Monday, dipping by around 5% to hover near $25 per share. This decline occurred just hours after former President Donald Trump made a surprise return to X, the social media platform formerly known as Twitter. The post marked his first on the platform since August 24, 2023, and it came shortly before a highly anticipated discussion with Elon Musk.

Everyone thinks $DJT will drop if Trump returns to X. Why? IMO that would be bullish for the stock.

Next Monday is Trump’s interview with Elon Musk. That could be a catalyst for an upside reversal.

Daily chart shows a consolidation. Let’s see what happens after the interview. https://t.co/OAzRWV8gIY pic.twitter.com/jl0lZvb9Zq

— Hiroshi Wada (@hiroshiwada_) August 10, 2024

The stock’s slump comes on the heels of DJT’s second-quarter financial report, which revealed a net loss of $16.4 million. Nearly half of this loss was attributed to expenses related to the company’s special purpose acquisition company (SPAC) deal. Revenue for the quarter, which ended on June 30, was reported at just under $837,000, representing a 30% decline compared to the same period last year.

These financial difficulties are not new for Trump Media. An updated regulatory filing from April showed that for the full year ending December 31, 2023, the company recorded sales slightly above $4 million, while net losses approached $60 million. DJT warned that it expects these losses to continue, citing ongoing challenges in achieving profitability.

The company’s stock has been on a rollercoaster ride in recent months, swinging between peaks and troughs. Notably, in June, the stock briefly surged following President Joe Biden’s stumble during his first 2024 presidential debate with Trump. However, the gains were short-lived, as Biden soon exited the race, leading to renewed pressure on DJT shares. The stock’s volatility has also been influenced by Vice President Kamala Harris’s strong performance in polls as the likely Democratic nominee, placing additional strain on DJT’s market performance.

Rep Marjorie Taylor Greene bought Donald Trump’s $DJT back in October 2021

Since then, it’s down 72%

And down another 6% today after Trump joined X pic.twitter.com/M3Iv63YHk9

— Nancy Pelosi Stock Tracker ♟ (@PelosiTracker_) August 12, 2024

Adding to the company’s troubles, Trump was found guilty in May of falsifying business records in connection with the 2016 presidential campaign. The guilty verdict, which came on all 34 counts, led to a 5% drop in DJT shares the day after the conviction.

Since its public debut on the Nasdaq after merging with Digital World Acquisition Corp., DJT shares have lost approximately 50% of their value. When Trump founded Truth Social in response to being banned from major social media platforms like Facebook and Twitter after the January 6 Capitol riots, the company’s potential seemed substantial. However, even after being reinstated on those platforms, Trump’s media venture has struggled to maintain its initial momentum.

Currently, Trump holds about a 60% stake in DJT, with the company’s market capitalization sitting at roughly $3.39 billion. At the current share price of around $25, Trump’s stake is valued at approximately $2 billion. This is a significant decrease from its value of over $4.5 billion shortly after the company’s public launch.

In late April, DJT hit a financial milestone that secured an additional $1.2 billion in cash for the company. Despite this influx of funds, stakeholders are bound by a six-month lockup period before they can sell or transfer their shares, adding another layer of complexity to the company’s financial outlook.

BREAKING 🚨 Donald Trump has returned to X$DJT is down 4.3% and sentiment is borderline “bearish” on Stocktwits https://t.co/03Rhb2708Q pic.twitter.com/UozwVlXN7z

— Stocktwits (@Stocktwits) August 12, 2024

Quotes

• Warren Buffett, CEO of Berkshire Hathaway: “Trump’s companies have had their ups and downs on Wall Street, often driven more by his personality and media coverage than by traditional business fundamentals.”
• Larry Kudlow, Economist and Former Director of the National Economic Council: “Trump’s businesses are like him—bold, aggressive, and often unpredictable. The stock performance reflects that same volatility.”
• Jim Cramer, Host of CNBC’s Mad Money: “Trump’s company stocks are not for the faint of heart. They’re subject to wild swings, but for some investors, the potential rewards can justify the risk.”
• Michael Bloomberg, Former Mayor of New York City and Business Magnate:“Trump’s companies have had a complex relationship with the market. The stock prices often mirror the unpredictability of his business ventures.”

Major Points:

• Trump Media & Technology Group (DJT) stock dropped 5% after Trump posted on X (formerly Twitter) ahead of his conversation with Elon Musk.
• DJT reported a significant net loss of $16.4 million in Q2, with revenue down 30% year-over-year.
• The company faces ongoing financial struggles, with nearly $60 million in net losses reported for the full year ending December 31, 2023.
• Shares have experienced volatility, especially following key political events, including Trump’s legal challenges and Joe Biden’s campaign developments.
• Trump’s stake in the company has halved in value since its public debut, reflecting broader challenges in the media and technology sector.

Conner T – Reprinted with permission of Whatfinger News