The stock price for Donald Trump's social media company, Trump Media & Technology Group, experienced a significant decline on Monday, closing down 18.4% at $26.61. This marks a more than 66% drop from its peak late last month, when it reached nearly $80 after merging with a shell company to trade on the Nasdaq under the symbol 'DJT.'
The decline in stock price can be attributed to various factors, including criticism that the valuation had surpassed the company's actual worth, given its financial losses and challenging prospects for success. Additionally, Trump Media filed documents with the U.S. Securities and Exchange Commission that could potentially pave the way for the sale of millions of shares in the future.
The filing, known as an S-1, pertains to warrants held by investors that can be converted into shares, as well as shares held by company insiders, including former President Donald Trump. However, Trump and other key figures are currently under a lock-up agreement that restricts them from selling their shares for approximately five months.
Trump Media's listing on the Nasdaq followed its merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC) that facilitated the public trading of its shares. The recent S-1 filing by Trump Media could potentially increase the number of outstanding shares, which might exert downward pressure on the stock price if demand does not match the increased supply.
The decline in Trump Media's stock price has impacted its shareholders, many of whom are individual investors who purchased shares to express support for the former president. Trump himself could own nearly 114.8 million shares, valued at $3.15 billion at the current price, down from almost $7.6 billion in late March.
Meanwhile, on the same day, Trump appeared in a New York court for the commencement of jury selection in his hush-money trial, marking the first trial of a former U.S. president.
