Former president Donald Trump’s media company, Trump Media & Technology Group Corp., saw a significant 16% rise in shares on Wednesday, marking a slight recovery from the billions in market value lost since its recent public debut. The company closed at $26.40, up from its previous close at $22.84, following its merger with Digital World Acquisition Corp. This rebound came amidst a flurry of trading activity, with over 13 million shares changing hands and warrants tied to the company soaring by 30% to $11.45.
This latest surge is part of a larger trend seen in firms utilizing special purpose acquisition companies (SPACs) to go public, with many experiencing volatile fluctuations in their stock prices. Despite Wednesday’s positive performance, Trump Media has still seen a significant drop of $5.4 billion in market value since its peak last month, resulting in the former president’s position now being valued at $2.1 billion.
Under the terms of the deal, insiders at Trump Media, including Trump himself, are currently prohibited from selling shares until September. However, there is a possibility that the board may waive these restrictions, allowing major shareholders to cash out once regulatory filings are approved in the US.
On Tuesday, Trump Media announced the completion of the research phase for its new live TV streaming platform. The company has faced challenges since its launch, reporting a loss of over $50 million last year while only generating $4.1 million in revenue, as indicated in regulatory filings.
Despite a 51% gain in shares this year, the stock’s volatility has made it a challenging investment for Wall Street professionals. It has become one of the most expensive shorts in the market, with financing fees exceeding 700% earlier this month. Options linked to the stock have prompted investors like former “Bond King” Bill Gross to consider selling costly derivatives instead of making direct bets on the stock.
Meanwhile, Trump is currently facing four criminal prosecutions as he continues his campaign to return to the White House. The first trial commenced in Manhattan on Monday, with allegations of falsifying business records to conceal a hush-money payment to a porn star before the 2016 election. Trump has vehemently denied the charges, labeling them as an outrage and persecution.
