Welcome to Extreme Investor Network, where we bring you the latest updates and insights on the world of finance. Today, we dive into the recent developments surrounding Trump Media & Technology Group (DJT) and its impact on the financial markets.
Shares of DJT, the parent company of Truth Social, President Donald Trump’s social media platform, plummeted by 8% in after-hours trading following the news of Trump’s guilty verdict on 34 counts of falsifying business records related to the 2016 presidential campaign.
Despite the setback, Trump Media went public on the Nasdaq after merging with Digital World Acquisition Corp. However, the company has faced challenges, with its shares dropping 10% since its public debut in March.
Trump’s creation of Truth Social came after his ban from major social media platforms like Facebook and Twitter, following the events of Jan. 6, 2021. Although Trump has been reinstated on those platforms, he continued to use Truth Social extensively during the trial.
Financially, Trump Media reported sales of $4 million with net losses nearing $60 million for the full year ending Dec. 31. The company anticipates ongoing losses due to profitability challenges. The first-quarter results showed losses of $327 million, mainly due to expenses related to the SPAC deal.
With over 621,000 shareholders, primarily retail investors, Trump maintains a 60% stake in Truth Social. At a closing price of $52 per share, Trump Media boasts a market cap of $7 billion, giving the former president a stake worth $4.2 billion. However, his stake was valued at over $4.5 billion right after the company’s public debut.
Although Trump secured an additional $1.2 billion in late April, stakeholders are subject to a six-month lockup period before selling or transferring shares. It’s a pivotal time for investors and the company as they navigate through these challenges.
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