Trump's Media Venture Sees Significant Stock Decline, Valuation Plummeting to $2.9 Billion
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Donald Trump's media and technology venture, Trump Media & Technology Group, saw a sharp decline in its shares, falling by as much as 12 per cent on Monday.
This extended selloff has diminished the value of Trump's stake in the firm to $2.9 billion, marking a major dip since its debut in late March.
Investor sentiment towards Trump's media endeavour has waned following the company's recent financial disclosures.
Earlier this month, the firm revealed major losses and indicated challenges in meeting its financial obligations.
Subsequently, the stock closed 8.4 per cent lower at $37.17 on Monday, remaining in stark contrast to its record high of $79 during its market introduction on March 26.
The company's shares have declined by approximately 40 per cent so far in April.
This downward trend poses possible setbacks for Trump, who was hoping for a major windfall by selling his shares to finance his 2024 presidential campaign and cover legal expenses.
However, lock-up restrictions for the next six months could hinder Trump from selling or leveraging his shareholding.
With Trump owning roughly 78.75 million shares in the company, the value of his stake has experienced a downturn from about $6 billion last month.
Presently, the entire market value of the Trump Media & Technology Group stands at approximately $5.55 billion.
While the falling stock prices are unfavourable for Trump and other shareholders, they offer a silver lining for short-sellers.
Trump Media & Technology Group has a short interest of about 4.75 million shares, which constitutes 12 per cent of its free float, according to analytics firm S3 Partners.
Monday's stock decline enabled those betting against the company to realise around $16 million in market-to-market profits.
Nonetheless, short-sellers remain at a 69 per cent loss for the year.
According to Ihor Dusaniwsky, the managing director of predictive analytics at S3 Partners, "DJT's recent price weakness has offset the huge financing costs short sellers are incurring and keeping many of them in the trade."
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