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The price of Trump media Shares closed Friday trading down nearly 20% this week.
DJT shares, which fell more than 8% in the first hour of trading on Friday, rose slightly by the end of the day.
Shares closed up 18 cents at $32.59, up about 0.5%.
But that closing price was still more than $38 below the price at which Trump Media shares were first sold when the social media company began publicly trading on March 26.
Shares of the company that owns the Truth Social app have fallen 47.4% so far in April, shedding billions of dollars from the company’s market capitalization.
Former President Donald Trump is the company’s largest shareholder, owning nearly 60% of the shares.
On Monday, Trump begins jury selection for his criminal trial in Manhattan Supreme Court on charges of falsifying business records related to a 2016 hush-money payment to porn star Stormy Daniels.
Trump Media opened its first day of trading on March 26 at $70.90 per share and peaked at nearly $80 the same day. During trading that day, the company’s market capitalization exceeded $9.5 billion.
As of Friday’s close, Trump Media’s market cap stood at $4.45 billion – a whopping $5 billion less than its peak more than two weeks ago.
Trump Media began trading on the stock market a day after merging with shell company Digital World Acquisition Corp., which was created to help a private company go public.
Trump Media had revenue of just $4.1 million last year and reported a net loss of $58 million.
This performance and the relatively high price of the company’s shares have attracted a lot of interest from short sellers, who make trades that are essentially bets that a company’s stock price will fall.
According to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, a leading financial data marketplace platform, so-called short interest in DJT this week was $208.7 million, with 5.44 million shares sold short.
There were fewer than 100,000 shares of Trump Media stock available to borrow and short sell. Traders who want to short stocks must borrow shares to sell with the expectation that they will later buy back the same number of shares at a lower price to return to the lender, thus pocketing the price difference between the trades.
Trump Media has 136.7 million shares outstanding.
A week ago, traders looking to sell Trump Media stock had to pay up to 900% of annual financing costs, meaning they would need a drop of then $30 per share within a month to break even on their trading to achieve, said Dusaniwsky.
Since then, however, the cost of financing short trades on Trump Media has fallen sharply, to 200%.
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Trump Media was launched after the social media giant
Trump, the presumptive Republican presidential nominee, frequently posts on Truth Social. He has used the app to denounce the four pending criminal cases he is facing, as well as civil lawsuits that have resulted in judgments against him totaling over $500 million.
Trump hosted a party at his Mar-a-Lago club in Palm Beach, Florida, this week to celebrate Trump Media.
“I think the truth has become so important. She’s strong, she’s committed,” Trump told attendees, according to a report from the RSBN news site.
“Remember, we have no debt and we have over $200 million in cash, which is very liquid,” Trump said of the company, whose CEO is former Republican congressman Devin Nunes.
—Additional reporting by CNBC’s Nick Wells
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2024-04-12 22:38:50
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