Following a merger, the former president Donald Trump owns the majority of the shares of Trump Media, and on Tuesday, the company’s share price dropped to its lowest point since becoming public in March.
Tuesday afternoon saw a dip in DJT shares to $17.72 a share before a little recovery to close the day at $18.08. The previous low for the stock was $19.38 per share on August 28.
From its peak of $79.38 per share on March 26, when Trump Media merged with a publicly listed special purpose acquisition business, the stock price has decreased by about 77%.
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A larger market decline on Tuesday, particularly for IT companies, was mirrored by Trump Media’s one-day decline of more than 7%. The Dow Jones Industrial Average plummeted 1.5%, the S&P 500 fell more than 2%, and the Nasdaq fell more than 3%.
However, the decline in the share price of Trump Media may not be entirely explained by market dynamics.
This is because, generally speaking, the company’s stock behaves more like a meme stock than a conventional investment. Additionally, it fluctuates in tandem with the Republican presidential nominee’s electoral prospects.
For instance, the stock rose sharply following Trump’s July assassination attempt escape, coinciding with a boost in support for his presidential campaign among the electorate and a number of well-known endorsements.
The most recent decline in Trump Media’s stock occurs only weeks before Trump, who holds about 59% of DJT’s outstanding shares, and other firm officials may profit from the stock’s decline. As of Tuesday, Trump’s investment was valued at more than $2 billion.
Due to a “lockup agreement,” which is scheduled to expire on September 25, Trump and other significant investors are now unable to sell their properties. However, if the stock price stays over $12 a share for 20 trading days during the 30-trading-day period that began last Friday, that deadline might be pushed up to as early as September 20.
Trump has not stated that he plans to sell, but rumors have it that his financial difficulties stemming from lawsuits and his numerous campaign costs may influence his choice.
Investors’ misgivings about the corporation may grow if Trump accepts the payout, which would lead to a wider selloff of the stock.
