The price of Trump Media closed trading Friday down nearly 20% for the week, with DJT shares dropping more than 8% within the first hour of trading on Friday. However, shares managed to eke out a slight gain by the end of the day, closing up 18 cents at $32.59. This closing price was more than $38 lower than the initial selling price of the shares when the company began public trading on March 26. Trump Media, the owner of the Truth Social app, has seen its shares drop by a significant 47.4% in April, resulting in the loss of billions of dollars in market capitalization. Former President Donald Trump is the largest shareholder in the company, owning nearly 60% of its stock.
Trump Media opened its first day of trading with a price of $70.90 per share on March 26, reaching a high of almost $80 later that same day. The company’s market capitalization exceeded $9.5 billion during that first day of trading. However, by the end of the week, Trump Media’s market cap had plummeted to $4.45 billion, a massive $5 billion decrease from its earlier high. Last year, Trump Media reported revenue of $4.1 million and a net loss of $58 million. The company’s poor financial performance and the high price of its stock have attracted interest from short sellers, who bet on a decline in a company’s share price.
Short interest in DJT was recorded at $208.7 million as of this week, with only 5.44 million shares available for short selling due to the limited availability of Trump Media shares. Traders who sought to short Trump Media shares a week ago faced annual financing costs of up to 900%, requiring a significant drop in share price within a month to break even. However, financing costs for short trades in Trump Media have since decreased to 200%. The company was created after Trump was banned from Twitter following the U.S. Capitol invasion in January 2021. Trump frequently posts on his Truth Social app, using it to address the criminal and civil cases pending against him.
Trump hosted a party at his Mar-a-Lago club in Florida to celebrate Trump Media, highlighting the importance and strength of the Truth Social app. Trump emphasized the company’s financial stability, noting that it has no debt and over $200 million in cash reserves. Former Republican congressman Devin Nunes serves as the CEO of Trump Media. Despite the company’s struggles in the stock market and the legal challenges facing Trump personally, he remains optimistic about the success and impact of Truth Social. The future of Trump Media and Truth Social will likely be impacted by market dynamics, regulatory challenges, and public perception.
