May 26, 2024

It’s been one month since Trump Media & Technology Group debuted on the Nasdaq to much fanfare, after its merger with blank check company Digital World Acquisition Corp. went through following almost two years of delays.

Former President Donald Trump caught a roughly $1.2 billion windfall this Tuesday thanks to an earnout share agreement detailed in a regulatory filing. It said that if the company’s dollar volume-weighted average price (DVWAP) — the average share price for a period of time, weighted by volume of shares — remained above $12.50 for a minimum of 20 trading days within any 30 trading day period, Trump would be entitled to 36 million earnout shares. Trump Media never traded below $22.55 in its first 20 trading days.

The former president owned 78.75 million, or approximately 57.6%, of the outstanding shares of Trump Media, when it debuted on the public markets.

Since going public on March 26, Trump Media has seen its stock go on a wild ride. Let’s take a look back at what’s happened so far.

The high-flying start

On its first trading day, the company behind Trump’s Truth Social traded at highs of $79.38 per share, bringing its market capitalization as high as $10 billion, before leveling off to about $8 billion. And it stayed there for the duration of its first trading week, buoyed by what many analysts saw as a “meme stock”-like trading surge (similar to Reddit, which went public a week earlier to much fanfare).

Meme stocks refer to company shares that become wildly popular online and are traded feverishly by retail and individual investors, sending prices soaring regardless of the company’s actual operating results or prospects.

The free-fall

John Rekenthaler, head of research at Morningstar, summarized Trump Media’s first month on the Nasdaq as “expectedly unexpected.”

“It’s been abnormally volatile — as volatile as any stock I can ever recall being,” Rekenthaler said.

Less than a week after its debut, the stock began to nosedive. Trump Media stock plunged after the company reported a 2023 loss from operations of almost $16 million, plus interest expense of $39.4 million, while bringing in just $4.1 million in revenue. The disclosure came in a Securities and Exchange Commission filing on April 1.

Trump Media disclosed in the filing that it “lacks the financial resources it needs to sustain operations for a reasonable period of time,” which it defined as one year from April 1, raising “substantial doubt” as to its ability to continue operations. The company said it expects to continue incurring operating losses and negative cash flow “for the foreseeable future.”

The stock continued to free-fall over the course of several weeks, shedding billions of dollars from its market value. Shares plunged again after the company registered the resale of substantially all of its outstanding securities last week.

And the stock dropped 14% to $22.84 after it announced a new TV streaming platform linked to its social media site Truth Social on the morning of April 16. Trump Media said that much like the social media platform, the streaming service will be “independent of Big Tech” and will offer content “that has been canceled, is at risk of cancellation, or is being suppressed on other platforms and services.”

Starting in the second half of last week, things began to rebound: Trump Media stock mounted a comeback that brought the company’s market capitalization above $4.5 billion — a more than $1 billion recovery after weeks of bleeding.

Rekenthaler said that because Trump Media is largely traded on sentiment — with many DJT traders largely buying shares based on a personal affinity for Trump himself— the stock will remain volatile as long as Trump is in the public eye.

“I think anytime Donald Trump is in the news is oxygen for the stock, in any way,” he said.

“Obviously Donald Trump’s gonna be in the news, at least until the presidential election, and I think that should help the stock, even if the news isn’t necessarily favorable for him,” Rekenthaler added.

He said the publicity around the former president’s ongoing criminal trial in New York over a “hush money” payment to porn star Stormy Daniels prior to the 2016 election could be a boon for Trump Media’s stock price. Trump has long denied any wrongdoing and allegations of an affair with Daniels.

Trump Media CEO Devin Nunes sent a letter to Nasdaq CEO Adena Friedman last Thursday and several congressional leaders this Tuesday, alleging that the company’s stock was being illegally traded in a practice known as “naked” short-selling — or the illegal sale of shares without borrowing them first. Nunes called on the congressional leaders to launch an investigation into what he said is the “unlawful manipulation” of DJT stock.

Shares of Trump Media closed up almost 8% on Thursday, ending the trading day at $38.49 a share and bringing its market capitalization to $5.26 billion.

The truth about Truth Social

In the past month, Truth Social’s daily active users on Android and iOS apps have stayed flat, hovering around the 100,000 range, according to data from Similarweb. That’s compared with competitors X and Reddit in the 30 million daily active users range, as well as Instagram’s Threads (about 3 million) and Bluesky (200,000).

Going public may have given Truth Social somewhat of a boost: The number of active daily users on Truth Social’s iOS and Android apps in the U.S. jumped 55% to 185,314 on April 20, according to Similarweb data, from 119,405 on March 25 — the day before Trump Media went public.

Daily visits worldwide to Truth Social roughly doubled between March 26, 2023 and March 26, 2024, and in the U.S. saw an 83% year-over-year jump before dropping off in the weeks after going public.

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