Shares of Trump Media, the parent company of the social media platform Truth Social, founded by former president Donald Trump, plummeted by more than 10%. Trump Media is a thematic stock for Trump that reflects the direction of the U.S. presidential election. Following the previous debate between Trump and Vice President Kamala Harris, analysts speculated that the sharp decline in Trump-related stocks might indicate a favorable shift for Harris in the upcoming presidential race.
On Wednesday, Trump Media’s stock closed at $16.68 on the New York Stock Exchange (NYSE), down 10.47% from the previous day. This is the lowest level since Trump Media began trading on NASDAQ under the ticker DJT at the end of March. Compared to its opening price of $70.90 on March 26, the stock has fallen 76.47% in less than six months.
The sharp drop followed a temporary 10% surge on the day of the presidential debate between Trump and Vice President Kamala Harris. This initial optimism about Trump’s performance quickly evaporated, leading to a substantial drop in stock value the following day.
Analysts interpret this downturn as a sign of disillusionment among Trump supporters. Political commentators observed that Harris appeared well-prepared and composed during the debate, whereas Trump was often agitated and fell into several traps set by Harris. This performance is perceived as a loss for Trump in the debate.
In the future, Trump Media’s stock is expected to fluctuate based on Trump’s electoral prospects. The stock cannot rise solely based on Truth Social’s performance. Last year, Truth Social’s revenue was only $4.1 million, with a net loss of $58 million.
The upcoming expiration of the lock-up agreement on September 19 could further impact the stock. After this date, Trump will be able to sell his 57% stake in the company, which is valued at approximately $1.9 billion based on the current closing price.
