Shares of Trump Media & Technology Group (TMTG) have experienced a significant downturn, dropping more than 13% on Tuesday amid ongoing repercussions following the legal troubles of its majority shareholder, former President Donald Trump. The company’s stock, traded under the ticker “DJT,” has seen a cumulative decline of approximately 40% since May 30. This date marks a pivotal moment when a New York jury convicted Trump on 34 felony counts related to falsifying business records.
Tuesday’s decline coincided with a critical deadline on June 18, prompting speculation that some investors might exercise their stock warrants. Trump Media, in an April 15 filing with the Securities and Exchange Commission (SEC), disclosed plans to offer nearly 21.5 million shares of common stock through the exercise of warrants. However, these shares cannot be sold until the registration statement is declared effective by the SEC. In the interim, warrant holders have the option to exercise them on a “cashless basis.”
Furthermore, Trump Media recently amended its registration statement to underscore uncertainties regarding Donald Trump’s social media activities. The company emphasized its limited ability to influence Trump’s use of other platforms beyond Truth Social, its flagship network. This clarification came in response to Trump’s occasional use of platforms like TikTok for public statements, potentially diluting Truth Social’s exclusivity and impacting Trump Media’s strategic focus.
The struggles of Truth Social are also contributing to investor concerns. The platform has faced challenges in retaining its user base, with average monthly visits declining by 39% from May 2023 to April 2024 compared to the previous 12-month period, according to Similarweb data. These metrics underscore ongoing operational challenges for Trump Media in establishing a competitive foothold in the social media landscape.
In addition to these issues, Trump Media’s financial performance has also come under scrutiny. The company reported a significant net loss of $327.6 million and total revenue of $770,500 in the first quarter of the year, as disclosed in its May earnings report. Such financial results, coupled with regulatory uncertainties and operational setbacks, have contributed to the erosion of investor confidence in TMTG.
As of the latest trading update, Trump Media & Technology Group maintains a market capitalization of approximately $5.4 billion. The company’s stock volatility and ongoing challenges underscore the complex intersection of business strategy, legal developments, and market dynamics impacting its operations.
This article originally appeared on NBCNews.com, highlighting the broader implications of these developments on Trump Media’s financial outlook and strategic direction amidst evolving regulatory landscapes and competitive pressures in the digital media sector.