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Trump Media & Technology Group Stock Resumes Climb
After a period of decline lasting several weeks, the stock of Trump Media & Technology Group has made a noteworthy resurgence. On Thursday, TMTG stock surged by nearly 26%, closing at $33.19 per share, marking the second consecutive day of gains and pushing the company’s market capitalization to $4.54 billion. This upward momentum began on Wednesday when the stock rose by over 15% by the close of the market.
Market Value Recovery
This recent streak of gains has seen Trump Media & Technology Group recover approximately $1 billion in market value. The company, which is responsible for the development of former President Donald Trump’s Truth Social platform, experienced a low point when its stock plummeted to $22.55 per share earlier in the week.
In pre-market trading on Friday, the stock showed an additional increase of almost 8%, further solidifying its upward trajectory.
Ownership Details
At the time of its public debut, Trump owned 78.75 million shares, representing around 57.6% of the total outstanding shares of Trump Media & Technology Group. Additionally, the former president stands to receive up to 36 million earnout shares, provided that the dollar volume-weighted average price of the company’s stock remains above $12.50 for a minimum of 20 trading days within a 30-day trading period.
Strategies to Combat Short-Selling
In an effort to prevent short-selling of Trump Media shares, the company recently shared guidelines on this matter through its FAQ section, targeting long-term shareholders who hold faith in the company’s future. Short-selling involves traders borrowing shares and selling them with the expectation of repurchasing them at a lower price in the future.
Public Debut and Performance
Trump Media & Technology Group went public on the Nasdaq under the ticker symbol DJT on March 26, following its merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC). Initially, Trump Media shares reached a peak price of $79.38 during the first trading week, resulting in a market cap exceeding $8 billion.
However, this initial surge was short-lived. The company faced a decline after reporting an operational loss of nearly $16 million in 2023, accompanied by an interest expense of $39.4 million, despite generating only $4.1 million in revenue. Comparatively, in 2022, Trump Media incurred an operational loss of $23.2 million and an interest expense of $2 million against a revenue of $1.5 million, as indicated in filings with the Securities and Exchange Commission.
Future Outlook
Trump Media & Technology Group continues to navigate challenges, including the registration of the resale of most outstanding securities and the forthcoming expiration of a lock-up agreement for shares held by specific insiders. Moreover, the company faced volatility when announcing its plans to introduce a live TV streaming platform. This platform, similar to Truth Social, is envisioned to be “independent of Big Tech,” offering content that is either at risk of cancellation or suppressed on other digital platforms.
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