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Trump Media Stock Swings in Volatile Trading After Verdict

Carmen Reinicke

31 May 2024 at 11:15 am·2-min read

(Bloomberg) -- Trump Media & Technology Group Corp. shares whiplashed in trading Friday between gains and losses in the aftermath of former President Donald Trump’s guilty verdict.

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The stock tumbled as much as 9% in New York, reversing a roughly 8% gain in the premarket session. Shares had shed as much as 15% in after-hours trading Thursday when a New York jury found Trump guilty of 34 counts of falsifying business records to conceal a hush-money payment to an adult-film star.

Volatile swings are common for shares of Trump Media, which operates the Truth Social platform. In the two months since the media startup went public through its completed merger with Digital World Acquisition Corp. the stock has moved up or down by an average of more than 7% each day. By comparison, Tesla Inc. — a famously volatile stock — saw an average swing of 2.9% over that same stretch.

Read more: Guilty Verdict Amps Up War-Gaming for Volatility Around Election

The swings owe to Trump Media’s status as something of a meme stock, or one that trades more on the whims of retail investors than fundamentals. As the former president moves closer to securing the Republican nomination for president, market watchers have looked at Trump Media shares as a barometer of sentiment, though there’s little indication the stock’s moves correlate to perceived election outcomes.

In March, Trump Media shares opened at about $70 in its first day of trading and surged as much as 59% that day before paring gains. In its first week of public trading, the company’s market value swelled to nearly $9 billion before plunging 66% — erasing nearly $6 billion in market value — just a few weeks later. This month the stock is down about 1%, with a current valuation closer to its debut of nearly $8.7 billion.

The company’s market value so far outstrips its revenue. Trump Media reported steep losses in a May earnings release, its first as a public company. In the first quarter, the company reported an operating loss of $12.1 million and $770,500 in revenue.

Trump holds a more than 60% stake in the company, valued at about $6 billion — the bulk of his $8.5 billion fortune, according to the Bloomberg Billionaires Index. Still, the former president and other insiders are unable to sell due to a lockup — set to expire in September — related to the deal, meaning any gains or losses are only on paper for now.

Read more: Trump Mastered The Art of the SPAC Deal. Cashing Out Is Harder

--With assistance from Kristine Owram.

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©2024 Bloomberg L.P.

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