President Trump's social media company suffered one of its biggest daily market losses on Wednesday, following Democratic victories in the midterm elections. Trading in Trump Media shares has long been viewed as a proxy for the former president's popularity. The stock decline has accelerated recently as quarterly losses mounted.
With the recent sell-off, shares are down over 90 percent from the March 26, 2024 debut price. Formerly valued at around $6 billion, Mr. Trump's stake is now worth just over $500 million. A fresh concern arises with newly empowered congressional Democrats potentially investigating business dealings involving the Trump family.
Specifically, Trump Media's practice of selling early access to Truth Social posts to investment firms for rapid trading has drawn Democratic denunciation as providing an unfair advantage. Some lawmakers have introduced bills to bar this practice. The precipitous fall has frustrated early backers.
Chad Nedohin, a part-time pastor and oil and gas engineer, feels betrayed, believing the company strayed from its original free speech mission for conservatives. Nedohin, who has sold most of his shares, hopes a securities lawyer will bring a shareholder lawsuit, arguing early believers are dismayed by the company's shifting directions. Further hurdles include a Nov. 30 option for $1 billion bond investors to redeem their investment, following Trump Media's $2 billion move into Bitcoin and crypto.
With at least $1.65 billion in cash and digital assets, the company faces a Dec. 14 shareholder vote on a merger with TAE Technologies, a nuclear fusion company yet to achieve commercial viability.
Source: New York Times Business · Summarized by HeadlinesBriefing