SHARES of Trump Media & Technology Group fell 8 per cent in choppy trading on Friday (May 31), after a jury found former US president Donald Trump guilty of falsifying documents to cover up a payment to silence a porn star ahead of the 2016 election.
The stock opened higher and was among the top trends on Reddit’s discussion forum WallStreetBets, indicating strong interest from individual traders. A majority of the firm’s 621,000 shareholders are retail investors, as of Apr 29, the company has said.
“It’s a meme stock that has no fundamentals. The volatility today is not surprising,” said Art Hogan, chief market strategist at B Riley Wealth.
The Republican presidential candidate for this year’s election owns a majority stake in TMTG, the parent of his social media platform Truth Social. The company also provides a way for Trump supporters to bet on his resurgence as a political figure.
The 12-member New York jury pronounced Trump guilty on all the 34 felony counts he faced, making him the first US president to be convicted of a crime.
The broader market showed little impact after the verdict in the case that was widely regarded as the least consequential of the four criminal prosecutions Trump faces. Neither a criminal conviction nor a prison sentence will affect Trump’s eligibility to become president if he wins the Nov five election.
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Trump’s net worth is tied to his stake in TMTG. He owned 64.9 per cent of the company as of Apr 26, which is worth US$5.7 billion.
TMTG’s current valuation of approximately US$9.2 billion is equivalent to about 2,200 times the loss-making company’s US$4.1 million revenue in 2023, according to LSEG data.
“The valuation of that stock has always been a bit of a question mark. It certainly isn’t making any money and is trading almost at an unfathomable level,” Hogan said. REUTERS
