Trump Media suspects illegal short sellers targeting stocks
Trump Media’s leadership claimed the company was being targeted by illegal short sellers seeking to depress the stock price.
Cheddar
Trump Media’s stock price fell more than 10% on Friday afternoon after rising sharply in the days leading up to the first presidential debate.
Hours before Donald Trump took on President Joe Biden in Atlanta, Trump Media & Technology Group stock closed at $36.73. After people across the country watched Biden stumble through multiple answers and Trump repeatedly address the immigration question, shares rose 8.3% at the open to $39.78.
But by Friday afternoon, that value had fallen to around $32 per share.
Market volatility is nothing new for the company behind Truth Social, often referred to as a meme stock.
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Trump Media share price
How Truth Social’s parent company went public
Trump founded his social media company in 2021 after being banned from other major platforms following the riots at the U.S. Capitol on January 6, 2021.
Trump Media went public on Nasdaq on March 26 through a merger with shell company Digital World Acquisition Corp., a special purpose acquisition company (SPAC). The merger was announced in 2021.
Trump’s stock market debut was spectacular, with Trump Media shares rising sharply, thanks in part to his supporters – who were also very pleased.
But since then, prices have fluctuated wildly, with the stock price fluctuating from a high of $79.38 per share on March 26 to a low of $22.84 on April 16. The price rose steadily during Trump’s hush money trial before falling for weeks after the former president was convicted on 34 charges.
This downward trend was reversed only a week before the debate.
Trump Media is considered a meme stock
The parent company of social app Truth has been compared to GameStop and AMC. Like those typical meme stocks, Trump Media is overvalued compared to its competitors – other social media companies – at least by conventional Wall Street standards.
In May, Trump Media reported a net loss of $327.6 million and revenue of $770,500 in the first quarter of 2024, according to an allegedly unaudited filing. Regulatory filings show the company was loss-making in 2023, making about $4 million in revenue and losing more than $58 million.
Experts have previously told USA TODAY that meme stocks rely on attention, and the debate, one of the most-watched events on television, certainly brought that attention to Trump.
