Trump’s Wealth Declines by $4 Billion as DJT Shares Reach All-Time Low

Former President Donald Trump saw his personal investment in Trump Media & Technology Group rise to over $6 billion in March, following the company’s debut on public markets. However, in the subsequent months, that fortune has dramatically decreased to below $2 billion due to losses and declining revenue.

The company’s share price has plummeted more than 70% since its March high, reaching a new low on Wednesday. As the largest shareholder, Trump has endured the most significant losses, although these are currently just on paper, as he has not yet been able to sell any of his shares.

Trump owns roughly 60% of Trump Media & Technology Group, a social media company that has faced financial challenges and trades under the ticker DJT, signifying Trump’s initials. The platform has cultivated a loyal following among his supporters, primarily retail investors who express their concerns about the sinking share price on Truth Social and blame short sellers for the downturn.

One user in the DJT investor group voiced a sentiment shared by many, suggesting that the company should temporarily halt trading to investigate what they believe to be manipulation of the stock price. “Just a thought why doesn’t [Trump Media & Technology Group] just halt the stock… while they check into all the manipulation,” the user wrote. “This would get the shorters scrambling!”

On Wednesday, Trump Media’s shares fell by $1.10, or 6%, to settle at $16.98, marking its lowest price since the initial trading began in March. The stock displayed little change during Thursday’s trading session.

Despite the accusations aimed at short sellers — investors who profit from a stock’s decline by selling borrowed shares and buying them back at a lower price — financial experts suggest that short selling isn’t the primary reason for the steep drop in market value. Ihor Dusaniwsky, managing director at S3 Partners, highlighted that only a limited number of shares are available for shorting, and that current price movements are more attributable to long selling activities.

“With today’s DJT trading volume at 5.3 million shares, even if all available shares were shorted, it would constitute less than 8% of the total trading volume,” Dusaniwsky noted. “The recent decline in DJT’s stock price has been largely influenced by long selling, rather than by short selling.”

Trump Media did not respond to requests for comment regarding the stock’s performance.

Several factors are contributing to the pressure on Trump Media shares. First, analysts have observed that the company’s stock behaves similarly to “meme stocks.” These types of stocks often experience price movements driven more by social media buzz and public sentiment rather than sound business fundamentals like increasing revenue or profit margins.

An example of this behavior was evident when Trump survived an assassination attempt in July, which propelled Trump Media’s stock price upward by over 30%. Polls at that time suggested Trump had a favorable chance in the upcoming November presidential election. However, just a week later, President Joe Biden stepped back from the race, leaving Vice President Kamala Harris to take the lead in the polls, tightening the race significantly. Following Biden’s announcement on July 21, Trump Media shares plummeted 51%.

Secondly, Trump Media is struggling with shrinking revenues and ongoing losses. While Truth Social maintains a dedicated following among Trump supporters, this has not led to financial gains for the company. Recently, Trump Media reported a 30% decrease in second-quarter revenue, dropping to $836,900 compared to the previous year. Additionally, the company incurred a loss of $16.4 million during the quarter, slightly better than the $22.8 million loss reported during the same period a year ago. The decline in revenue was attributed to decreases in advertising sales due to changes in revenue sharing with an advertising partner.

Finally, the company is nearing the end of a lockup provision that has prevented Trump and other insiders from selling their shares since the company went public. Such lockups aim to prevent significant stock sales by major investors right after a company goes public, as these transactions could severely impact a company’s stock price.

This lockup period will expire on September 19, potentially allowing Trump and other insiders to sell their shares. While it remains unclear whether any insiders will take this step, the impending expiration may be contributing to the stock’s volatility.

Source: CBS News