Following the recent debate between Donald Trump and Kamala Harris, shares of Trump Media & Technology Group experienced a significant drop, signaling investor concerns about Trump’s prospects in the 2024 presidential race. The stock’s decline has raised questions about the company’s financial stability, particularly as its business struggles with growth and profitability.
Sharp Drop in Stock Value
On the day following the debate between Donald Trump and Kamala Harris, shares of Trump Media & Technology Group fell significantly. The stock dropped by 15% in early trading, reflecting growing investor concerns about Trump’s performance and his potential electoral outcome. The stock closed at $16.68, down more than 10% for the day. This decline comes as Trump Media’s stock has already lost about 75% of its value since reaching its peak in March.
Ties to Trump’s Electoral Fortunes
The company, which runs Truth Social, has seen its fortunes closely tied to Trump’s political standing. Trump’s ownership of nearly 60% of the company’s shares makes the stock price sensitive to any major political developments. For instance, Trump’s stock surged after his strong showing in an earlier debate against Joe Biden and after surviving an assassination attempt in July. However, the recent debate with Harris prompted a downturn, reflecting negative sentiment.
Financial Struggles Continue
Trump Media has faced several financial challenges in recent quarters. According to regulatory filings, the company reported a 30% drop in revenue in the second quarter of 2024 and a loss of $16.4 million during the same period. These losses come amid the company’s difficulties in growing its user base and increasing advertising revenue. Trump Media has been unable to turn a profit since launching Truth Social after Trump was banned from Twitter and Facebook in 2021.
Future Uncertainty
Trump Media’s future remains uncertain, with a significant regulatory lock-up period expiring on September 19, 2024. After this date, Trump and other insiders will be allowed to sell their shares. Whether or not major investors decide to sell could have further implications for the company’s stock price and overall valuation.
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