Trump Media plunges amid plan to issue more shares. It's lost $7 billion in value since its peak.
Trump Media plunges amid plan to issue more shares. It's lost $7 billion in value since its peak.
The former president's media company has had a rough start on Wall Street, shedding two-thirds of its value since its peak.
Should be worth negative $. It doesn't make any money and has no way to make a positive cash flow legally.
Yeah crazy that it's still worth $2.1 billion. But, there's always tomorrow.
"Worth" is a stretch. That's a fully unrealized sum of money that will continue to shrink as shares are sold
I'm sure it's worth whatever the server hardware sells for second hand.
Much less. The company has like $60m in debts and $3m in assets and lost $56m last year. You need to find a way for the company to make enough to pay off its debts before becomes worth anything.
$1.73
The filing also includes all the shares held by the former president. Trump, however, remains under a "lockup" deal that largely restricts him from selling his shares for another roughly five months. His son, Donald Trump Jr., who is a director on the board, and CEO Devin Nunes, are also bound by the lockup.
The stock plunge has erased billions from Trump's stake — at least on paper. The shares soared when they began trading on March 26, giving Trump's 57% ownership position a value of $6.25 billion. But after DJT's recent slump, that stake is worth $2.1 billion, representing a paper loss of $4.15 billion.
People keep saying trump wasn't prevented from selling for 6 months, and I have no idea why.
But this is why I was happy it started trading so high. trump was/is pushing supporters to buy shares as a way of donating. But those people are throwing their money away and it'll still crash before trump can sell. He's not just losing profit, he losing donations too.
Plus this way trump has to spend 6 months watching something literally trading under his name (djt) constantly hemorage money and there's not a damn thing he can do about it.
When he saw that 6 billion number, he immediately considered it "his money" so even if he makes a couple hundred million selling his whole stake in this; it's going to feel like he's lost billions to him.
And hopefully the DJT stock lumps on without him for years as a shitty penny stock
People keep saying trump wasn't prevented from selling for 6 months, and I have no idea why.
So, yes, he's currently subject to a lockup agreement. But, the board can always waive that agreement, and given the board is made up of Trump acolytes, there's no reason to take it too seriously (yes, if they did that, it could be subject to a shareholder lawsuit if a sale resulted in a plunge in the share price, based on the claim that the board was failing in its fiduciary duty, but by the time any such trial made its way through the courts, it probably wouldn't matter).
4d chess would be trump placing shorts before they even went public.
Shorting before the merger wouldn't have made any sense: the stock price went from around $17.50 to over $50 within the first week of trading and probably won't come back to earth for a while. Meanwhile borrowing costs, after that initial spike when the stock was at its highest, were astronomical, so it wasn't economical to do it right after, either.
The real 4D chess would be to get that lockup waived, short the stock now (borrowing costs have since fallen back to earth), sell your shares, then close out the short after the price drops (sure, you run the risk that the SEC goes after you for stock manipulation, but I doubt Trump cares).
Turns out Forbes was probably right when they called it 3 days ago with their article "Sell Trump Media Stock (DJT) Now - An Implosion Is Likely". A few of their many criticisms:
- Still-open new million-share spigot from the convertible securities and contracts that are converting
- Highly diluting "bonus" 40M share issuance if the stock can remain above $17.50 for 20 of 30 days. (Counting the March 26 merger day, the number on April 12 would be 18.)
- "Do not wait. These storm clouds are not going to dissipate." and "This teetering tower of negative issues is a perfect reason for a mass shareholder exodus."
The point was only ever to funnel money into Trump's pockets. A lot of people lost some, some lost a lot, but it was a successful operation to get that bastard some financial relief.
Once it's crashed, what's to keep someone from buying a controlling stake in the company and pivoting to something Trump would despise? Some philanthropic organization for poor non-white people. Or just the eff/aclu but for rape
Trump is enough of a control freak I'm sure he retained 51% so he stays in control no matter who buys the rest of the shares, so a hostile takeover is unlikely. But man would it be hilarious to use it to the benefit of something he hates, like helping migrants get citizenship.
But is he even smart enough to ensure that he maintains 51%. If his past performance of..we'll, literally anything he's done, is any indication, he's probably left himself open to losing majority stake.
The problem becomes buying shares means giving Trump money he didn't earn.
Not if bought on the open market already.
The company only receives money on IPO. after that, shares the trade private hands only profit the owner of the share.
still, wouldn't want to give any of these people money for their shares. let them ride them to 0 and trump media shuts down.
Permanently Deleted
I don't know if he'll make it to the 6 month cliff, but he may be able to leverage the shares sooner without selling.
Nope. Unless the lockup is waived or modified by the board, Trump cannot "lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell … or otherwise transfer or dispose of" his shares (this language is well-tested boilerplate for any lockup agreement). In case it's not clear, that covers using them to get a leveraged loan.
Far more likely is the board simply waives the lockup which frees him to do whatever he wants, in which case my bet is he just sells off some or all of his stake 'cuz who gives a shit if one of his cult members catches the falling knife.
This is the best summary I could come up with:
After a short-lived honeymoon, former President Donald Trump's media company is experiencing a rough reception on Wall Street.
When companies issue additional shares, they take on the risk of their stock price coming under downward pressure.
"Bought more today just like a lot of you," one member of a Truth Social group dedicated to DJT shares wrote on Monday.
"Trump has NOT signaled intentions to sell his shares," wrote Chad Nedohin, a pastor and musician, on Truth Social on Monday.
He's also turned to Truth Social to rail about his criminal trial, which began Monday, over accusations of falsifying business records related to a "hush money" payment.
About 600,000 retail investors have bought shares in Trump Media & Technology group, with about 200,000 of them buying into the stock within the last few weeks, Nunes told Fox Business earlier this month.
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