Trump Media Stock Plummets Amidst Election Fallout, Facing Key Financial Hurdles
New York, NY – Shares of Trump Media & Technology Group (DJT) experienced a dramatic single-day drop of 24.5%, marking its largest decline since its public debut, as Democrats secured control of Congress. The company’s market capitalization has shrunk to approximately $1.11 billion. Investors are now closely watching two critical upcoming events: the release of its third-quarter earnings report after market close on Monday, and a potential buyback of up to $1 billion in convertible bonds by November 30th.
Steep Decline Since IPO
Trump Media’s stock has been on a relentless downward trajectory since its initial public offering in March 2024. The stock, which closed at a high of $66.22 shortly after its listing, had fallen to $3.99 by the close of trading on November 6th, representing a staggering 94% decrease.
The company’s market value has also contracted significantly, from a peak of around $11.17 billion before the October general election to its current valuation of approximately $1.11 billion, a loss of roughly $10 billion. The most recent sharp decline was triggered by the November 3rd midterm elections, which saw Democrats regain control of both the House and the Senate.
Historical Stock Performance
Calculating from the November 6th closing price of $3.99, the stock has fallen 94% from its post-IPO closing high of $66.22 on March 27, 2024. Compared to its closing price of $51.51 before the October election on October 29, 2024, the stock has dropped 92.3%.
Looking further back, when its predecessor SPAC, Digital World Acquisition (DWAC), announced its merger in October 2021, the stock price briefly surged to $175 intraday. From that peak, the stock has fallen a remarkable 97.7%.
Financials and Bitcoin Holdings
The company’s core business operations are minimal. Its second-quarter financial report revealed revenue of only about $1.67 million between April and June, with a net loss of $238 million. This loss was primarily attributed to unrealized losses from Bitcoin price depreciation, rather than actual cash outflows.
Currently, the company’s market capitalization is closely aligned with the value of its Bitcoin holdings. As of July 31st, the company disclosed it held approximately 14,139 Bitcoin, including pledged assets. Based on a Binance price of roughly $75,925 per Bitcoin on November 8th, these holdings are valued at approximately $1.07 billion, closely mirroring the company’s market cap of $1.11 billion.
However, these figures are not directly comparable. The company also carries approximately $960 million in convertible debt, with some of its Bitcoin assets pledged as collateral to creditors.
Trump’s Stake
Donald Trump’s trust holds 114.75 million shares. At the November 6th closing price, this stake is valued at approximately $458 million, a stark contrast to its value of about $5.9 billion at the October 29, 2024, closing.
Upcoming Milestones
- November 9th (US Eastern Time) After Market Close: Third-Quarter Earnings Report. According to a company announcement on November 3rd, a conference call is scheduled for Tuesday, November 10th, at 6:00 AM Taiwan time. Key areas of focus will be the actual coin holdings at the end of September, any unrealized losses, cash burn rate, and any improvement in core business revenue.
- November 30th: Convertible Bond Buyback. A merger prospectus filed with the SEC on November 6th states that convertible bondholders can request the company to repurchase their bonds at par value in cash on this date. This could require up to $1 billion, potentially forcing the company to sell Bitcoin or other digital assets to meet the obligation.
- December 14th: TAE Merger Shareholder Meeting. The same prospectus schedules an extraordinary general meeting of shareholders for December 14th (US Eastern Time), to be held online, to vote on the proposed merger with TAE. If the merger is completed, Trump Media’s original shareholders would hold approximately 52.5% of the new entity. Analysts suggest that the execution risk of the merger could increase if regulatory committees begin investigating the Trump family’s businesses.
