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From Trump Media and Technology Group went public earlier this year, the conversation about it mostly focused on the magnitude of the joke. Truth Social’s parent company barely made more than $1 million last quarter — during the election. This is the the best of meme stocks. It is founders And listeners were accused of fraud. It was just a get-rich-quick scheme. But, obviously, memestock traders got it right. The case for DJT, as it is known in the stock market, was basically the same as buying Amazon, Uber, Google or any other tech giant before it entered monopolistic territory: a day, it would be too big and too powerful to ignore. That day has now arrived: Trump has won the election and the Republicans control Congress. These should be the exact conditions that would allow Trump’s social media business to thrive.
So why is Trump Media absolutely getting trashed on Wall Street?
DJT, which was briefly worth more than the New York Times Co., has lost about half its value since late October – with most of that decline occurring since Election Day – falling to $27.74 per share, reducing Trump’s personal fortune by more than $300 million. dollars. (He owns the majority of shares.) Three of its insiders, including the CFO, recently sold $16 million worth of stock. And Patrick Orlando, the former CEO, sold almost all of his the entire 5 percent stake. There isn’t a single reason for this selloff, but it appears that the company created the conditions for its own market boom by flooding the market with stocks and, well, just being a very risky stock while ‘roughly everything else on Wall Street is coming out.
You would think the opposite would happen. Trump has used Truth Social to announce every cabinet appointment he intends to make, such as Matt Gaetz for attorney general. This is also where he appears more cowardly, more combative.
“There are rumors and/or false, untrue and possibly illegal statements, perhaps made by market manipulators or short sellers, that I am interested in selling shares of Truth,” he said. he declared. wroteadding that he would “investigate” anyone insinuating that he was selling his shares. (Trump said he wouldn’t sell, but he would be eligible for a tax-free windfall if he sold his stake and exchanged the money for Treasury bonds.) All of this makes it clear that the company has a few value: it is the press service of the most powerful world leader. And this is perhaps reflected in the fact that the price has more than doubled since hitting a low of $12.15 on September 23.
On Truth Social, the question is: What happened? Some users don’t believe that stocks fall on their own and believe that various bad actors are doing it. behindlike shadowy short sellers and big institutions like billionaire Ken Griffin’s Citadel Securities. (Griffin and Citadel Securities were scarecrows during the memestock craze of 2021 and were wrongly blamed for the stock’s slide. Griffin has given millions to the Republicans, but not Trump directly. After Trump Media CEO Devin Nunes once accused Citadel of shorting the stock, Griffin called him “proverbial loser. “)
“How difficult it is for the SEC to call these bad actors, or perhaps drop by their office unannounced. Why is this allowed I guess?? wrote A.
“Wow – DJT keeps dropping. Where are you @DevinNunes??,” wrote another.
“Feeling pretty retarded in the ATM…guess I thought winning the presidency would have a longer term effect, not just a day in the pre-market,” wrote a third.
The answer is probably more prosaic. Traders bought DJT to make it short-term gains before the election, then abandoned its shares when demand began to weaken. And since November 5, the price of bitcoin surpassed $90,000 and broad indexes like the S&P 500 hit new highs. There simply aren’t enough people who would want to take the risk and buy Trump’s company when other things could make them money more immediately. And basically, it’s a business that’s not really a business. Truth Social is not a site that many people spend time on – it sees 200,000 every day. When you go online, you may be bombarded with ads for ivermectin, the quack treatment for COVID, which means it’s always not attracting well-paid advertisers.
Of course, DJT is a certified memory stock, so these drawbacks don’t necessarily apply. On Friday, shares rose about 3.8 percent, DJT’s first day of gains of the week, although it’s hard to really understand why. The company could hit a million dollars tomorrow for no reason.