Just a few weeks after its peak, the stock price of Donald Trump's social media venture, Trump Media & Technology Group, has plummeted, now sitting nearly 60% below its recent highs.
Monday's trading session saw a significant dip of 16.8%, with shares valued at $27.10, a stark contrast from the near $80 mark it hit after merging with a special purpose acquisition company (SPAC) to list on Nasdaq under the symbol "DJT."
Market Skepticism and Regulatory Moves
Critics argue that Trump Media's initial stock surge was overblown, pointing to the company's financial losses and questionable prospects.
Adding to the market jitters, the company filed an S-1 document with the SEC, signaling a potential future sale of millions of shares, including those held by Donald Trump himself.
Although Trump is currently restricted from selling his shares due to a lock-up agreement, the filing includes all insider shares, fueling speculations about the company's next moves.
Easing the Path to Public Trading
Trump Media capitalized on its merger with Digital World Acquisition Corp., a SPAC, which typically helps companies simplify the process of going public.
Kristi Marvin of SPACInsider.com notes that S-1 filings are standard post-merger procedures, intended to facilitate the future exercise of warrants and share sales.
However, such moves can dilute the stock value if the increased supply doesn't meet rising demand.
A Rough Patch for Investors
The current decline hits hardest at smaller investors, many of whom are supporters of the former president and purchased shares to back his venture.
This downturn not only affects these retail investors but also Trump's personal finances, with his potential holdings taking a multi-billion dollar hit as the stock price wanes.
On a broader scale, the drop in stock price shadows Trump's personal challenges, including the commencement of his hush-money trial, a historic event as he is the first former U.S. commander in chief to face trial.
