Trump Media shares drop below $30 after trading begins

[Pelican Press 0]

Trump Media shares drop below $30 after trading begins

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The price of Trump Media shares fell below $30 in early trading Friday morning, more than $40 lower than what its shares first sold for when the social media company began public trading on March 26.

DJT shares declined by more than 8% within the first hour of trading Friday.

The latest price fall for the ticker continued a slide that included a 5.4% drop on Thursday, and a more than 8.5% decline on Wednesday.

Shares of Trump Media, which owns the Truth Social app, have dropped by more than 47% month to date, 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. Trump on Monday is set to start jury selection for his ********* trial in Manhattan Supreme Court on charges of falsifying business records related to a 2016 hush money payment to ***** 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 1:07 p.m. ET on Friday, Trump Media’s market cap was $4.28 billion, after shares pared some of the early price drop. The stock was selling for $31.26 per share, a decline of 3.56% at that point.

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%.

Read more CNBC politics coverage

Trump Media was launched after the social media giant X, then known as

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, 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 *********** presidential nominee, frequently posts on Truth Social. He has used the app to condemn the four pending ********* 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

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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 *********** congressman Devin Nunes.

— Additional reporting by CNBC’s Nick Wells.

This is developing news. Check back for updates.

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