Shares of Trump Media Rally After Recent Volatility
Shares of Trump Media showed resilience on Tuesday, recording a third consecutive day of gains following a notable downturn triggered by former President Donald Trump’s criminal conviction in New York. The stock price of the company overseeing Truth Social initially surged by 11% at market open before stabilising later in the day. Eventually, the shares closed at $36.37 each, marking an 8.5% increase for the day.
Market Open Surge
Trump Media, trading under the symbol DJT on the Nasdaq, exhibited a remarkable 21% surge the previous day, leading to a substantial uptick in the company’s market capitalisation and Donald Trump’s personal net worth, given his significant ownership stake of nearly 65% in Trump Media. Notably, since the closing price of $26.75 per share on Thursday, the value of Trump Media stock has ascended by an impressive 36%.
Despite the positive momentum in stock performance, the presumed Republican presidential contender faces restrictions on selling any of his shares until late September, coinciding with the expiration of a post-merger lock-up period. This constraint might influence the dynamics of the stock in the near term as investors monitor Trump’s position regarding his equity holdings.
Following a protracted decline that commenced subsequent to a Manhattan jury declaring Trump guilty on 34 felony counts related to falsifying business records, Trump Media observed a substantial 46% decrease in its stock value between the verdict on May 30 and the prior week’s conclusion. While the direct impact of the legal outcome on the stock remains ambiguous, the company acknowledged in regulatory filings that adverse developments in Trump’s legal battles could exert negative repercussions on TMTG and its Truth Social platform.
Regulatory Approval Impact
The downtrend in Trump Media’s stock price coincided with a pivotal event involving the U.S. Securities and Exchange Commission approving Trump Media’s registration of additional shares on June 18 post-market close. This registration empowered early investors to vend certain shares and capitalise on previously issued warrants. Stock warrants afford holders the prerogative to purchase shares at a predetermined price within a specified timeframe.
In a notable disclosure, Trump Media announced on Friday an anticipated inflow of over $69.4 million from warrants exercised solely on Thursday and Friday. This financial injection is poised to augment the company’s liquidity and potentially bolster investor confidence amid the evolving narrative surrounding Trump’s legal challenges and the performance of Truth Social in the competitive social media landscape.
