Donald Trump’s media company falls 12%, extends sell-off

SHARES of Donald Trump’s media and technology firm fell as much as 12 per cent on Monday (Apr 8), extending a sell-off that has now reduced the value of his stake in the operator of Truth Social to US$2.9 billion.

After its strong debut in late March, investors have soured on Trump Media & Technology Group after the company disclosed millions of US dollars in losses earlier this month and said it would struggle to meet its financial liabilities.

The company’s stock closed 8.4 per cent lower at US$37.17 on Monday, a far cry from the record high of US$79 it had notched during its debut on Mar 26. It is down about 40 per cent so far in April.

The declines are reducing a potential windfall for Trump who could sell his shares to raise money for his 2024 presidential campaign and legal expenses, although lock-up restrictions for six months could prevent him from selling or borrowing against his shareholding.

Former US president Trump – who owns about 78.8 million shares in the company – has seen a sharp slide in the valuation of his stake from around US$6 billion last month.

The market value of the whole of Trump Media & Technology Group is now below that figure, at about US$5.6 billion.

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But the declines are welcome news for short-sellers who have suffered hefty losses on the stock so far this year.

Trump Media & Technology Group has a short interest of about 4.8 million shares, or 12 per cent of its free float, according to analytics firm S3 Partners.

Monday’s decline meant those betting against the stock made about US$16 million in market-to-market profits, though those shorting the stock are still down 69 per cent for the year.

“DJT’s recent price weakness has offset the huge financing costs short sellers are incurring and keeping many of them in the trade,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners. REUTERS