Trump Media & Technology Group’s stock experienced a significant surge on Wednesday, rebounding from recent losses following the announcement of its ambitious plan to launch a streaming network. The company, which owns Truth Social, saw its shares rise by 15.6%, marking its best one-day performance since March 26, according to data from Dow Jones Market Data.
The sudden uptick in the highly volatile stock raised eyebrows among investors and analysts alike, with many scrambling to discern the underlying factors driving the rally. This surge came on the heels of a 14% decline in the stock price on Tuesday, coinciding with the announcement of Trump Media’s intention to introduce a new livestreaming network through its flagship app, Truth Social, with eventual plans for expansion onto television platforms.
Truth Social, positioned as a conservative alternative to mainstream social media platforms like Facebook and Reddit, has garnered considerable attention for its ideological stance and its association with former President Donald Trump. Despite this, its user base remains considerably smaller compared to its competitors, with Trump Media reporting revenue of $4.1 million in 2023, accompanied by a significant net loss of $58.2 million.
Former President Donald Trump holds a significant 57% stake in Trump Media, valued at approximately $1.8 billion at Tuesday’s closing price. Additionally, he stands to receive an additional 36 million earnout shares in the company, subject to certain performance conditions. These conditions stipulate that the stock’s volume-weighted average price must remain above specified levels over a three-year period following the company’s merger on March 25.
It’s worth noting that Trump is currently prohibited from selling his Trump Media shares until a six-month lockup period expires. However, he retains the option to seek a waiver from the company’s board, which includes individuals such as his son and former members of his administration.
In the midst of these developments, Trump finds himself embroiled in a high-profile criminal trial, marking the first such trial of a former U.S. president. The trial centers on allegations of falsifying New York business records in connection to the 2016 presidential election, particularly involving payments made to adult film actress Stormy Daniels. Trump has consistently denied the allegations, attributing them to political motivations and characterizing the trial as politically motivated.
As the trial unfolds, its duration is estimated to span from six to eight weeks. Jury selection has already commenced, with initial jurors being selected to oversee the proceedings. The outcome of the trial, along with the trajectory of Trump Media’s stock price, remains subject to considerable uncertainty, as investors closely monitor developments and assess their potential implications for the company’s future.