The price of Trump Media took a nosedive last week, closing trading on Friday down nearly 20% for the week. The company’s shares, which plummeted by more than 8% within the first hour of trading on Friday, managed to claw back some gains by the end of the day, closing up 18 cents at $32.59, an increase of around .5%.
This closing price was a stark contrast to the initial price of Trump Media shares when the social media company first went public on March 26. Back then, shares sold for more than $38 higher than the closing price on Friday.
The drop in Trump Media’s stock price has been significant, with shares of the company, which owns the Truth Social app, plummeting by 47.4% so far in April. This decline has wiped out billions of dollars in the company’s market capitalization.
Former President Donald Trump, who is the biggest shareholder in the company, owning nearly 60% of its stock, is facing legal troubles as well. Trump is set to start 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’s market cap has taken a hit as well, dropping from a high of $9.5 billion on its first day of trading to $4.45 billion by Friday’s close. The company’s poor financial performance, with revenue of just $4.1 million and a net loss of $58 million last year, has attracted the attention of short sellers.
Short interest in Trump Media has been high, with traders betting on the company’s share price dropping. However, financing costs for short trades in Trump Media have fallen sharply in recent days, providing some relief for those looking to profit from the company’s struggles.
Overall, Trump Media’s rocky start in the public market has raised concerns about the company’s future prospects and the impact of legal challenges facing its biggest shareholder. Investors will be closely watching how the company navigates these challenges in the coming weeks.
