Trump Media Stock Takes A Nosedive As More Shares Are Issued
Former President Donald Trump’s media venture Trump Media has seen its stock price take a beating recently, falling over 20% in just one week as the company looks to issue more shares.
Trump Media, the parent company of social network Truth Social, saw its shares drop another 18% on Monday alone after filing paperwork to issue new shares. Since launching via a SPAC merger in late March, the stock has given up over $7 billion in market value.
After debuting with fanfare and doubling in price in its first two days of trading, Trump Media shares have been on a downward trend. Supporters hoped this was just a short-term bump in the road, but the new share issuance has investors worried about stock dilution. Over the counter.
Some Truth Social Fans Buy The Dip While Others Bail
On Truth Social, reactions to the stock plunge were mixed. Some users said they were buying more shares now at lower prices, believing the long term potential remains. However, others admitted to selling for a loss, questioning whether Trump Media could really succeed in today’s Big Tech landscape.
The filing to issue additional shares is a common move for companies but does come with short term downside risk. By expanding the total number of shares outstanding, each existing share represents a smaller portion of the company. This can pressure the stock price if demand does not increase proportionately.
But It’s Still Very Early Days For The Trump Startup
While the startup struggles are to be expected for any new company, especially one in media and tech, some point to Trump Media’s unique challenges. Building a viable alternative to mainstream platforms will be an uphill battle. However, others note it’s far too soon to count them out.
With hundreds of thousands of retail investors now backing the company and its figurehead still a polarizing political force, Trump Media may yet prove its doubters wrong. But to do so, it will need to start showing real user and revenue growth, not just stock hype. The next few quarters will be crucial.
