The Truth social network logo is seen in this photo illustration on 04 December, 2023 in Warsaw, Poland.
Jaap Arriens | Nurphoto | Getty Images
Shares of Trump Media soared more than 25% on Monday, as the firm majority-owned by former President Donald Trump sought to bounce back from a weekslong plunge that cut the stock price nearly in half.
Trump Media, which trades as DJT on the Nasdaq, was trading around $34.50 a share on much higher than average volume as of 12:30 p.m. ET. The stock closed Friday at just over $27.
The gains are welcome news for the company behind Truth Social, which has seen its stock price fall by nearly 50% in the roughly three weeks since a New York jury found Trump guilty of 34 felony counts of falsifying business records.
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Shares of Trump Media sunk even lower last week, after its registration of additional shares was declared effective by the Securities and Exchange Commission. The clearance threatened to dilute the stock price by adding more tradable shares to the company’s float.
The registration allowed early investors to resell certain shares and exercise previously issued warrants. Stock warrants give their holder the ability to buy shares at a predetermined price within a certain time frame.
On Friday, Trump Media said it expected to rake in more than $69.4 million in proceeds from the warrants exercised on Thursday and Friday.
The company’s recent stock plunge and sudden reversal are just the latest example of the volatility that has come to define its first three months of public trading.
After completing a lengthy public merger with a special purpose acquisition company in March, the newly formed Trump Media shot up by double digits in its frenzied Nasdaq debut. But after touching a per-share high of $79.38, the stock quickly cratered, falling to a share price of nearly $22.
Trump Media stock has continued to swing dramatically up and down, even after the company in last month’s quarterly earnings report revealed a net loss of $327.6 million on revenues of just $770,500.
Trump Media currently has a market capitalization of nearly $6 billion. Its value is largely dependent on the popularity of Trump, the headline-generating ex-president and presumptive Republican presidential nominee.
Trump posts almost exclusively on Truth Social, the microblogging social media platform that is Trump Media’s sole product to date. But Trump in early June joined the social media behemoth TikTok, whose traffic dwarfs that of Truth Social.
The company in a recent regulatory filing acknowledged that it “may lack any meaningful remedy” if Trump decides to abandon Truth Social in the future.
Trump owns 114,750,000, or about 64.9%, of the company’s stock. He cannot sell any of his shares until late September, when a post-merger lock-up period expires.
This is developing news. Please check back for updates.