Trump Media shares end week down nearly 20%, losing billions in market cap

The
price
of


Trump
Media
shares
closed
trading
Friday
down
nearly
20%
for
the
week.

DJT
shares,
which
dropped
by
more
than
8%
within
the
first
hour
of
trading
Friday,
eked
out
a
slight
gain
by
the
end
of
the
day.

Shares
closed
up
18
cents
at
$32.59,
an
increase
of
around
.5%.

But
that
closing
price
still
was
more
than
$38
lower
than
what
Trump
Media
shares
first
sold
for
when
the

social
media
company
began
public
trading
on
March
26.

Shares
of
the
company,
which
owns
the

Truth
Social
app,
have
dropped
by
47.4%
so
far
in
April
wiping
out
billions
of
dollars
in
the
company’s
market
capitalization.

Former
President

Donald
Trump
is
the
biggest
shareholder
in
the
company,
owning
nearly
60%
of
its
stock.

On
Monday,
Trump
is
set
to
start
jury
selection
for
his
criminal
trial
in
Manhattan
Supreme
Court
on
charges
of
falsifying
business
records
related
to
a
2016
hush
money
payment
to
porn
star
Stormy
Daniels.

Trump
Media
on
March
26
opened
its
first
day
of
trading
with
a
price
of
$70.90
per
share,
hitting
a
high
of
nearly
$80
later
that
same
day.
During
trading
that
day,
the
company’s
market
capitalization
topped
$9.5
billion.

By
Friday’s
close,
Trump
Media’s
market
cap
stood
at
$4.45
billion
—
a
whopping
$5
billion
lower
than
the
high
it
hit
more
than
two
weeks
ago.

Trump
Media
began
public
trading
a
day
after
it
merged
with
the
shell
company
Digital
World
Acquisition
Corp.,
which
was
created
to
help
a
private
firm
go
public.

Trump
Media
last
year
had
revenue
of
just
$4.1
million,
and
reported
a
net
loss
of
$58
million.

That
performance
and
the
relatively
high
price
of
the
company’s
stock
have
drawn
keen
interest
from
short
sellers,
who
make
trades
that
are
effectively
bets
that
a
company’s
share
price
will
drop.

As
of
this
week,
so-called
short
interest
in
DJT
was
$208.7
million,
with
5.44
million
shares
shorted,
according
to
Ihor
Dusaniwsky,
managing
director
of
predictive
analytics
at
S3
Partners,
a
leading
financial
data
marketplace
platform.

There
were
fewer
than
100,000
shares
of
Trump
Media
available
to
borrow
to
sell
short.
Traders
who
want
to
sell
stock
short
must
borrow
shares
to
sell,
with
the
expectation
that
they
will
later
buy
back
the
same
number
of
shares
at
a
lower
price
to
return
them
to
the
lender,
pocketing
the
price
difference
between
the
trades.

Trump
Media
has
136.7
million
outstanding
shares.

A
week
ago,
traders
who
wanted
short
Trump
Media
shares
had
to
pay
up
to
900%
in
annual
financing
costs,
meaning
they
would
need
a
then-$30-per-share
drop
within
a
month
to
break
even
on
their
trade,
Dusaniwsky
said.

Since
then,
however,
financing
costs
for
short
trades
in
Trump
Media
had
sharply
fallen,
to
200%.

Trump
Media
was
launched
after
the
social
media
giant
X,
then
known
as
Twitter,
banned
Trump
from
that
app
on
the
heels
of
the
Jan.
6,
2021,
invasion
of
the
U.S.
Capitol
by
a
mob
of
his
supporters.

Trump,
who
is
the
presumptive
Republican
presidential
nominee,
frequently
posts
on
Truth
Social.
He
has
used
the
app
to
condemn
the
four
pending
criminal
cases
he
faces,
along
with
civil
lawsuits
that
have
resulted
in
judgments
against
him
topping
$500
million.

Trump
this
week
hosted
a
party
at
his
Mar-a-Lago
club
in
Palm
Beach,
Florida,
to
celebrate
Trump
Media.

“I
think
that
Truth
has
become
so
important.
It’s
strong,
it’s
dedicated,”
Trump
told
attendees,
according
to
a
report
on
the

RSBN
news
site.

“Remember
we
have
no
debt,
and
we
have
over
$200
million
dollars
in
cash,
which
is
very
liquid,”
Trump
said
of
the
company,
whose
CEO
is
former
Republican
congressman
Devin
Nunes.

—
Additional
reporting
by
CNBC’s


Nick
Wells