Shares of Trump Media & Technology Group, the owner of social networking site Truth Social, experienced a significant decline on Thursday following the conviction of former President Donald Trump in his hush money trial. A New York jury found Trump guilty of falsifying business records in a scheme aimed at unlawfully influencing the 2016 election through hush money payments to a porn actor who alleged a sexual encounter with him.
Trump Media's stock, trading under the symbol “DJT,” dropped approximately 9% in after-hours trading as news of the verdict spread. Since its late March debut, the stock has exhibited remarkable volatility, aligning itself with the group of meme stocks subject to sharp fluctuations as retail investors seek to capitalize on momentum swings.
Despite tripling in value this year, with frequent double-digit percentage fluctuations in a single day, the stock reached a peak of nearly $80 in intraday trading on March 26. In contrast, the S&P 500 has seen a year-to-date increase of almost 10%.
In its first earnings report as a publicly traded entity, Trump Media disclosed a loss exceeding $300 million for the last quarter. The company reported a $327.6 million loss for the three-month period ending March 31, attributing $311 million to non-cash expenses related to its merger with Digital World Acquisition Corp, a special purpose acquisition company (SPAC).
Trump Media & Technology recently terminated its auditor, BF Borgers, who faced allegations of significant fraud by federal regulators. This move led to a delay in the filing of the company's quarterly earnings report. Prior to this, the media company had changed auditors multiple times, with one resigning in July 2023 and another being dismissed by the board in March.
Trump faced 34 counts of falsifying business records at his company in connection with an alleged effort to conceal potentially damaging stories during his 2016 presidential campaign. The charges stemmed from reimbursements made to his former lawyer, Michael Cohen, following a $130,000 hush money payment to Stormy Daniels. Trump was accused of misrepresenting these reimbursements as legal expenses to mask their connection to the hush money payment.
In his defense, Trump argued that the payments to Cohen were for legitimate legal services.
