Trump Media & Technology Group (DJT), the parent company of former President Donald Trump’s social media platform Truth Social, saw its stock plummet by 8% in extended-hours trading on Thursday. This sudden and drastic drop came mere hours after Trump was found guilty on all 34 counts of falsifying business records intended to influence the 2016 presidential campaign.
With a criminal record and potential prison time looming, the former president’s ability to lead the company he founded is in jeopardy. The verdict has raised questions about the viability of Truth Social, which was once touted as a rival to major social media platforms.
The verdict, which will likely be appealed, has sparked a wave of uncertainty among investors, leading to a significant sell-off of Trump Media shares. The company’s market capitalization now stands at approximately $7 billion, with Trump’s stake valued at around $4.2 billion.
This development marks a significant blow to Trump Media, which has struggled to gain traction since its public debut at the end of March. Despite Trump’s exclusive use of Truth Social during the trial, the platform has failed to attract a significant user base, and the company’s financials have suffered as a result.
In its latest quarterly report, Trump Media disclosed net losses of $327 million, largely attributed to expenses related to its SPAC deal. The company warned of continued losses, citing greater profitability challenges.
As the former president faces sentencing on July 11, investors are growing increasingly wary of the company’s prospects. With a staggering 621,000 retail investors holding shares in Trump Media, the stakes are high.
The guilty verdict has raised questions about the future of Truth Social, which has been touted as a rival to major social media platforms like Facebook and Twitter. Trump founded the platform after being banned from these sites following the January 6 Capitol riots in 2021.
Trump Media’s struggles are a far cry from the company’s initial public offering, which was hailed as a major success. The stock debuted at $27.50 per share and quickly surged to $52.40, giving the company a market capitalization of over $10 billion.
However, since then, the company has faced numerous challenges, including a lack of user growth, increased competition, and regulatory scrutiny.
Trump’s legal troubles are far from over, with multiple cases still pending. The road ahead is fraught with uncertainty, and the stakes are higher than ever. – The future of Trump Media and Truth Social will be shaped by the consequences of this guilty verdict.
