Shares in Trump Media & Technology Group, the owner of social networking site Truth Social, are slumping after former President Donald Trump was convicted in his hush money trial.
A New York jury found Trump guilty of falsifying business records in a scheme to illegally influence the 2016 election through hush money payments to a porn actor. As soon as news of the verdict emerged, shares of Trump Media fell 9% in after-hours trading on Thursday, and were down 5% early Friday.
The stock, which trades under the ticker symbol “DJT,” has been extremely volatile since its debut in late March. It is part of the group of meme stocks that experience drastic swings from highs to lows as small-pocketed investors try to catch the right momentum. The stock has tripled in value this year and has made significant moves either higher or lower on a single day.
Interestingly, other meme stocks like AMC Entertainment and GameStop, as well as shares of social media companies, also experienced declines. However, the decline for Trump Media was double that of any stock in either sector before the opening bell.
Trump Media had warned investors in a filing with the U.S. Securities & Exchange Commission before going public about the potential risks associated with the legal proceedings faced by the former president. The company acknowledged the negative impact it could have on the stock.
Additionally, Trump Media reported a loss of more than $300 million in the last quarter. The company attributed this loss to non-cash expenses related to its merger with a special purpose acquisition company called Digital World Acquisition Corp. This merger provided Trump Media with a quick route to becoming a publicly traded company, but it also attracted less scrutiny.
It’s worth noting that Trump Media recently fired its previous auditor after the auditor was charged with “massive fraud” by federal regulators. This led to a delay in filing the quarterly earnings report.
All in all, the conviction of former President Donald Trump in his hush money trial has had a significant impact on the shares of Trump Media & Technology Group. The stock has experienced volatility since its debut, and the company has faced financial challenges as well. It will be interesting to see how these events unfold and how they will continue to shape the future of Trump Media and its Truth Social platform.
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