The stock market is reacting to the recent conviction of former President Trump, with significant implications for Trump Media and Technology Group, a company closely associated with him. As the top shareholder with 65 percent ownership, equivalent to 115 million shares, Trump's legal troubles have had a direct impact on the company's stock performance.
Following the guilty verdict, Trump Media and Technology Group experienced extreme volatility, initially dropping by 15 percent before fluctuating further. Traders attribute this sell-off to concerns about the negative impact of a criminal conviction on the Trump brand and the potential financial strain it could place on the top shareholder.
While there is uncertainty about how a criminal conviction might affect Trump's holdings in the company, experts point out the possibility of SEC intervention due to the bad actor disqualification rule, particularly for individuals in executive positions. The type of stock owned by Trump, such as voting shares, could also influence any regulatory actions that may follow.
Jason Katz, a managing director at EBS, notes that the volatility in Trump Media and Technology Group's stock is not surprising, given the company's financial fundamentals. With just over $4 million in sales for the previous year and operating at a loss, the company faces challenges that could lead to a potential takeover or a decline to zero value in the future.
Despite these concerns, retail investors continue to trade DJT shares, driven in part by their support for the former president. The ongoing developments in both the legal and financial spheres surrounding Trump and his associated company are closely watched by market participants for their potential long-term implications.
