Investing in the stock market can be a rollercoaster ride, especially when it involves a company tied to a controversial figure like former President Donald Trump. Trump Media & Technology Group, the social media company founded by Trump, has been a hot topic among investors as they try to navigate the ups and downs of its stock price.
Since going public earlier this year, Trump Media’s shares have seen significant fluctuations, closely mirroring Trump’s political prospects. As Vice President Kamala Harris gained ground in the polls, Trump’s popularity took a hit, and so did the company’s stock value. In the past month alone, the stock has plummeted by over 40%, reaching a new low of $20.99.
One crucial factor that has been weighing on investors’ minds is Trump’s potential to sell his shares in the company. With Trump owning about 60% of the outstanding stock, the looming lockup period expiration on September 20 could pave the way for him to start cashing out. This move could have far-reaching implications, not just on the company’s stock price but also on Trump’s own financial situation.
However, another development has added to the uncertainty surrounding Trump Media’s future. The company recently struck a deal with Yorkville Advisors to register and sell up to $2.5 billion worth of new shares. While this move could increase the company’s cash reserves per share, it also raises questions about its ability to generate revenue and turn a profit in the long run.
According to University of Florida finance professor Jay Ritter, the influx of new shares could be putting downward pressure on the stock price, as existing investors worry about dilution and potential share sales from insiders. Ritter emphasizes the importance of Trump Media implementing a successful business strategy to attract investors and restore confidence in the company.
At Extreme Investor Network, we understand the challenges and opportunities that come with investing in volatile markets. Our team of experts is here to provide you with valuable insights and analysis to help you make informed investment decisions. Stay tuned for more updates and tips on how to navigate the ever-changing world of finance.