Trump Media & Technology Group’s shares hit an all-time low as competition intensifies in the presidential race, raising questions about investor confidence in the former US president’s ventures.
The majority-owned Trump Media & Technology Group (DJT) has hit an all-time low in share value as the former US President Donald Trump returns to a rival social media platform and his lead dwindles in upcoming presidential election polls.
On Tuesday, Trump Media saw a decline in its shares to the extent of $21.33 – more than 4 percent less compared to previous times. The stock concluded with a loss of about 3.7 percent at $21.42 and this has been continuing for eight successive sessions now.
The slide in Trump’s lead within the polls and election wagering markets over the past few weeks has also had an impact on stocks, which some retail traders have viewed as a stake in whether or not he secures another term.
Lou Basenese, president and chief market strategist at MDB Capital in New York, stated that he has viewed Truth Social and DJT more as a voting mechanism rather than an investment mechanism. He added that the valuation of these platforms was never justifiable when compared to their fundamentals.
During the beginning of this month, there was a report on Trump Media – whose primary property is Truth Social application. The company disclosed generating revenue worth only $837,000 and incurred losses amounting to $16.4m for the quarter earlier. With its market value standing at around 4.3 billion dollars presently from an initial valuation that exceeded eight billion dollars in the previous year’s commencement; it has witnessed a significant reduction in value recently
After merging with Digital World Acquisition Corp, the stock debuted on Nasdaq on March 26 and hit an unprecedented pinnacle of $79.38.
Next month, when the insider lockup period ends, Trump is anticipated to qualify for cashing out his social media company’s 114.75 million shares- equivalent to roughly 60% of the stake he holds in it.
Basenese stated that the current situation reflects how it has consistently corresponded with the likelihood of success or failure in trading. As a result, as the chances of winning have decreased due to increased competition, record lows have been observed. Additionally, Basenese attributes this occurrence to experiencing an insider lockup issue.
Last week marked the first time in almost a year when Trump started publishing on the X platform, which coincided with an interview conducted by its owner Elon Musk.
Over the past few weeks, Trump’s substantial advantage in polls over Vice President Kamala Harris as the Democratic nominee has diminished.
On the PredictIt politics betting platform, contracts for a Harris win are currently trading at 56 cents with a possible payout of $1, giving us 78 days before the November 5 election.
Trump’s contracts have dropped to 46 cents, from a high of 69 cents in mid-July.
Source: Reuters
