Trump Media shares fall to new low after merger

Trump Media and Technology Group The share has been in a downward trend for weeks and reached new low after new low for much of August. When markets opened after Labor Day weekend, Trump Media stocks fell even further.

Shares of Trump Media, the company behind former President Donald Trump's Truth Social, fell more than 8 percent to a new post-merger low of $17.72 on Tuesday afternoon. The company's market value has plunged nearly 69 percent since its Nasdaq debut on March 26 under the ticker symbol DJT.

On Friday, the company’s shares rose fell below $20 for the first time since its IPO.

This is happening as the six-month lock-up period that required Trump to hold his shares for 180 days after their Merger with Digital World Acquisition Corp., an acquisition special purpose vehicle, or SPACon March 25. This will allow the former president to sell his share in the company with a significant profit, depending on the value of the shares at the time of sale.

There appeared to be no business-related reason for Tuesday’s decline. Analysts have compared DJT to a “meme stock”, How GameStop, AMCAnd Redditbecause its shares are traded largely on the basis of sentiment rather than on the company's actual operating results or prospects.

At the height of the hype immediately after its debut, Trump Media had a market value of around $8 billion – more than double its current market capitalization of $3.69 billion.

In recent weeks, the stock has also been seen as an indicator of the Republican presidential candidate's electoral chances and performance, with investors buying shares at the height of the election cycle to express their support for Trump. Trump owns 114.75 million shares of Trump Media, or about 60% of the company's outstanding common stock.

John Rekenthaler, vice president of research at Morningstar, previously told Quartz that he expects Trump Media stock “Go to zero or something close to it” if Trump loses the election in November to Democratic candidate and Vice President Kamala Harris.

Trump Media's market success was based in large part on the company's connection to the former president. The company itself has stated in regulatory filings that its “success depends in part on the popularity of its brand and the reputation and popularity” of Trump and that “negative reactions to publicity from [Trump]or the loss of its services could adversely affect TMTG’s revenues and operating results.”