Shares of Trump Media Dip Near Record Lows Amid Weak Results

Shares of Trump Media & Technology Group, the company majority-owned by former U.S. President Donald Trump, fell and approached record lows on Wednesday.

The decline follows disappointing quarterly results and Trump’s recent return to the social media platform X, formerly known as Twitter.

Impact of Trump’s Return to X:

Trump’s return to X, marked by an interview with the platform’s owner, Elon Musk, has highlighted concerns for investors. Trump’s account was suspended in January 2021 but reinstated by Musk in 2022 after he acquired the platform.

Despite frequent posts on his Truth Social app, which caters to some conservatives, Trump’s decision to engage with Musk on X has underscored Truth Social’s niche status in the social media landscape.

The interview, which drew 1.3 million viewers, covered a range of topics, including Trump’s assassination attempt, geopolitics, and the economy. Analysts suggest that broadcasting the interview on X rather than Truth Social signals a lack of confidence in Trump’s social media venture, impacting investor sentiment.

Stock Performance and Financial Challenges:

Trump Media & Technology Group has seen its stock decline significantly since going public in March. The company’s market valuation has dropped from over $9 billion earlier in the year to $4.73 billion. On Wednesday, shares fell 1.9% to $23.54 and tumbled to $22.84 on April 16 following news of potential stock sales.

The company reported another quarterly loss last Friday, with revenue down 30% compared to the previous year. Additionally, a significant portion of funds has been allocated to a licensing agreement for the new streaming service, Truth+. These factors have raised concerns about the company’s future if Trump’s popularity continues to decline.

Impact of Election Prospects:

Trump’s diminishing lead in polls and election betting markets has also affected the stock. With 83 days remaining before the U.S. presidential election on November 5, contracts for a Trump victory are trading at 45 cents, down from 69 cents in mid-July before President Joe Biden’s exit from the race.

Analysts express concerns that if Trump fails to win the election, it could further depress Trump Media’s stock value. Even if he wins, there are doubts about whether the stock will regain its previous highs.

Analyst Insights:

“The company’s stock is slowly facing the truth of its upside-down financials,” said Michael Ashley Schulman, chief investment officer at Running Point Capital. Dannie Hewson, head of financial analysis at AJ Bell, noted that Trump’s decision to broadcast on X instead of Truth Social may have disappointed investors, highlighting the latter’s limited reach.

“If Trump loses the presidential election, it may be a further blow to DJT shares, but even if he wins, the stock’s time in the sun may have passed,” Schulman added.