After two days of turbulence, investors in Trump Media & Technology Group’s stock are finally experiencing a respite. The company’s stock, TMTG (DJT), rebounded by 20% in early afternoon trading on Wednesday following its earlier decline earlier in the week. Shares closed more than 14% lower on Tuesday after Truth Social, the company’s flagship product, announced major expansion into streaming, a notoriously expensive industry. It also fell 18% on Monday after the company revealed plans to sell millions of additional shares.
Despite the recent fluctuations, Trump Media is down about 60% from its all-time high of $8 billion when it went public following a merger with a blank-check acquisition company in March 2023. The company’s current market value is just under $3.8 billion, well below its peak value and significantly lower than its initial trading price of nearly $70 per share.
The volatility surrounding Trump Media’s stock can be attributed to several factors, including the former president’s name recognition and politically polarizing nature. His close association with the company has attracted attention from investors, traders, and news outlets alike, creating an unstable environment for the stock. Additionally, concerns about the company’s ability to generate profits and its lack of fundamental backing have further contributed to its high valuation uncertainty.
Trump Media lost $58 million in revenue in 2023 and made only $4.1 million in revenue overall. These extreme swings have had significant implications for former President Trump’s net worth, who serves as both chairman and largest shareholder of the company. On one particularly bad day, his net worth plummeted by $1 billion before recovering somewhat after the recent uptick in shares. However, Mr. Trump continues to face legal challenges related to a criminal trial involving allegations that he falsified business records during a hush money scheme prior to the 2016 election for which he has pleaded not guilty.
In conclusion, despite recent gains in its stock price following two days of turmoil earlier this week
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