DJT stock drops 8% after Trump found guilty in hush money trial

The stock price of Trump Media & Technology Group (DJT), the parent company of Truth Social, the social media platform founded by former President Donald Trump, experienced a 6% decline in early trading on Friday. This drop came after Trump was found guilty on all 34 counts of falsifying business records with the intention of influencing the 2016 presidential campaign.

Trump, who is expected to appeal the verdict, is scheduled to be sentenced on July 11. If convicted, he could face up to four years in prison for each count.

Trump Media, which owns Truth Social, went public on the Nasdaq stock exchange through a merger with Digital World Acquisition Corp, a special purpose acquisition company. Since its initial public offering at the end of March, the company’s shares have fallen approximately 10%.
Following his removal from major social media platforms like Facebook and Twitter after the Capitol riots in January 2021, former President Trump established Truth Social, now known as X. Despite being reinstated on the aforementioned platforms, Trump primarily utilized his Truth Social account throughout the trial.

A regulatory filing in April indicated that Trump Media, the parent company of Truth Social, reported sales of slightly over $4 million, while incurring net losses of nearly $60 million for the full year ending on December 31. The company cautioned that it expects to continue experiencing losses due to increasing profitability challenges.

In May, the company disclosed its first-quarter results, revealing losses of $327 million, primarily attributed to expenses associated with its SPAC deal. Trump Media also noted that as of April 29, over 621,000 individuals held stock in the company, with the “vast majority” being retail investors.
Trump currently holds approximately 60% ownership in Truth Social. Based on the closing price of $52 per share on Thursday, Trump Media has a market capitalization of around $7 billion, which means the former president’s stake is valued at approximately $4.2 billion. Immediately after the company went public, Trump’s stake was valued at slightly over $4.5 billion.

In late April, the stock reached a significant milestone that resulted in an additional $1.2 billion for Trump. However, stakeholders are still required to abide by a six-month lockup period before they can sell or transfer their shares.