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Trump Media & Technology Group: A Month After Going Public
It has been one month since Trump Media & Technology Group made its debut on the Nasdaq stock exchange amidst great excitement, following a merger with blank check company Digital World Acquisition Corp. that had been delayed for two years.
The Financial Windfall for Donald Trump
Former President Donald Trump secured a substantial $1.2 billion windfall this week through an earnout share agreement outlined in a regulatory filing. The agreement stipulated that if the company’s dollar volume-weighted average price (DVWAP) remained above $12.50 for at least 20 trading days within a 30-day period, Trump would be entitled to 36 million earnout shares. Trump Media surpassed this mark, never dropping below $22.55 in its initial 20 trading days.
When Trump Media went public on March 26, the former president held 78.75 million shares, representing approximately 57.6% of the outstanding shares of the company.
The Rollercoaster Ride of Trump Media Stock
Since its public debut, Trump Media’s stock has experienced significant fluctuations. Initially, the company’s share price soared to highs of $79.38 per share on the first day of trading, pushing its market capitalization to $10 billion before stabilizing around $8 billion. This surge in price was reminiscent of meme stocks, characterized by intense online trading by individual investors, independent of a company’s financial performance.
However, the stock soon faced challenges as its value plummeted following the disclosure of a significant loss from operations in 2023 and doubts about the company’s financial sustainability. This led to a continuous decline in the stock price over subsequent weeks, exacerbated by news of the resale of a large portion of its securities.
Despite these setbacks, Trump Media announced the launch of a new TV streaming platform tied to its Truth Social media site, aimed at providing content that is deemed controversial or censored on other platforms. This move initially resulted in a 14% drop in the stock price.
Recent developments have seen a rebound in Trump Media’s stock, with the company’s market capitalization recovering to over $4.5 billion. Analysts attribute this volatility to the sentiment-driven trading surrounding the company, particularly due to the strong personal affinity that many Trump supporters have for the former president.
Legal Concerns and Allegations of Stock Manipulation
Trump Media CEO, Devin Nunes, has raised concerns about the alleged illegal trading of the company’s stock through “naked” short-selling practices. He has called for a congressional investigation into what he claims is the unlawful manipulation of Trump Media’s stock price.
Despite these challenges, Trump Media’s stock closed almost 8% higher on a recent trading day, reaching $38.49 per share and bringing the company’s market capitalization to $5.26 billion.
Evaluating the Performance of Truth Social
In the past month, Truth Social, the social media platform associated with Trump Media, has seen relatively stable daily active users on its Android and iOS apps, hovering around 100,000. This pales in comparison to competitors like X and Reddit, which have millions of daily active users.
The public listing of Trump Media appears to have boosted Truth Social’s user numbers, with a 55% increase in active daily users on the platform’s apps in the U.S. Data indicates a doubling of daily visits to Truth Social globally between March 26, 2023, and March 26, 2024, with a considerable surge in U.S. activity.
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