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| The company’s stock price at the opening bell was at its lowest intraday level since the Truth Social app owner began publicly trading as DJT on the Nasdaq in late March |
Shares of Trump Media & Technology Group (TMTG) plunged by more than 10% on Wednesday, marking a new low for the company just a day after its majority shareholder, former President Donald Trump, faced off against Vice President Kamala Harris in a highly anticipated presidential debate. The stock drop occurred on the heels of what many political analysts and commentators described as a lackluster performance by Trump, which may have shaken investor confidence in the media venture he leads.
Trump Media, the parent company of the Truth Social platform, began trading on the Nasdaq under the ticker symbol DJT in March. Since its launch, investing in Trump Media has often been seen as a reflection of Trump’s political fortunes. With Trump currently the Republican nominee for the 2024 presidential election, the company’s performance is increasingly tied to his popularity and electoral prospects. As such, fluctuations in the stock price are often viewed as a barometer of Trump's political momentum.
The sharp decline in stock price followed Tuesday night's debate in Philadelphia, where many commentators, both liberal and conservative, noted that Vice President Kamala Harris appeared more prepared and composed compared to Trump. Harris, now the Democratic nominee after President Joe Biden stepped down from the race, managed to keep Trump off balance throughout the debate, leading some to believe that his base of supporters may not have been pleased with his performance.
While Trump repeatedly attacked Harris during the debate, he struggled to stay on topic, frequently falling into traps set by the vice president. Harris' poised demeanor and ability to remain on the offensive likely swayed undecided voters, according to post-debate analyses. Her campaign capitalized on the momentum, immediately challenging Trump to a second debate, a request that Trump has so far rejected.
In a Truth Social post on Wednesday, Trump expressed reluctance to engage in a rematch, claiming that Harris only sought another debate because she was "beaten badly." He added, "Why would I do a rematch?" indicating that he may not participate in another face-off.
The debate performance and Trump's response may have played a role in the 10% plunge in Trump Media's stock price on Wednesday. The drop came after a brief surge in the stock earlier in the week, where shares rose by as much as 10% on Monday and Tuesday. Investors appeared initially optimistic about Trump's prospects going into the debate, but that sentiment quickly evaporated as post-debate critiques poured in.
The stock decline also underscores a broader downward trend for Trump Media, which has faced a series of setbacks in recent months. Since its merger with a blank-check company in late March, TMTG’s stock price has plummeted by as much as 75% from its intraday high. The slump coincided with President Biden's decision to drop out of the 2024 race and endorse Harris, creating uncertainty among Trump Media investors who see the company’s future tied to Trump's political success.
Moreover, the drop in share price comes at a critical time for Trump Media, as the company approaches a significant milestone. On September 19, a lock-up agreement will expire, allowing Trump and other insiders to begin selling their shares in the company. Trump, who holds nearly 57% of Trump Media’s stock, saw his stake's value shrink to around $1.9 billion at Wednesday's closing price. It remains unclear if Trump plans to sell off any portion of his shares once the lock-up lifts, a move that could further impact the company's stock price.
For now, Trump Media’s future appears inextricably linked to the former president’s political fortunes. While the company continues to be a focal point for investors hoping to capitalize on Trump’s return to the political arena, the steep drop in its stock price following the debate serves as a stark reminder of the volatility that comes with betting on a media enterprise so closely tied to a single individual’s political career. As the 2024 election season progresses, the fate of Trump Media will likely continue to fluctuate in response to Trump’s campaign performance and the broader political landscape.
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