President Trump’s social media company recorded one of its biggest daily market losses on Wednesday, a day after Democrats scored staggering victories in the midterm elections.
Shares of Trump Media & Technology Group plunged 24 percent to close at $4.49 — a low for the parent company of Truth Social.
On Wall Street, trading in shares of Trump Media have always been something of a proxy for Mr. Trump’s popularity. But the decline in Trump Media’s stock price has accelerated in recent months as its quarterly losses have mounted.
With the most recent sell-off, shares of Trump Media are down more than 90 percent from the closing price on the stock’s first day of trading, on March 26, 2024. Shortly after the company made its Wall Street debut, Mr. Trump’s stake in Trump Media was valued at around $6 billion. Now it is worth just over $500 million.
And there is a fresh concern for the company: newly empowered congressional Democrats with the ability to start investigations into business dealings involving Mr. Trump and his family.
One that could face scrutiny is Trump Media’s business of selling early access to Mr. Trump’s Truth Social posts to investment firms seeking to use the information to make lightning-fast trades. Immediately after Trump Media announced plans to offer this early access to the president’s posts, several congressional Democrats denounced it as giving an unfair advantage to some traders. Other Democratic lawmakers introduced a bill that would bar Trump Media from selling this early access.
A Trump Media spokesman declined to comment.
The precipitous fall in shares of Trump Media has left some early backers of the company frustrated and angry.
Chad Nedohin, a part-time pastor and oil and gas engineer who had been one of Trump Media’s biggest proponents online, feels betrayed. He said the company had strayed too far from its original mission of promoting a free speech platform for conservatives.
Mr. Nedohin, who has sold most of his shares, said he would like to see a securities lawyer bring a shareholder lawsuit. He said early investors were true believers in Truth Social and the company’s mission, and have been dismayed to see it constantly moving in different directions.
“The early shareholders did the right thing for the right reason, but it is devastating that Trump is not the person we thought,” Mr. Nedohin said.
There are other hurdles on the horizon. On Nov. 30, investors in a $1 billion bond offering have the option of redeeming their original investment from Trump Media, according to company regulatory filings. The debt offering, from 2025, helped fuel Trump Media’s $2 billion move into Bitcoin and crypto. It is unclear how many investors might choose to exercise that option.
At the moment, the company has at least $1.65 billion in cash, investments and digital assets.
And on Dec. 14, Trump Media shareholders will vote on the company’s proposed merger with TAE Technologies, a nuclear fusion technology company. TAE’s auditor has said the company, which still doesn’t have a commercially viable product, is on the verge of running out of money.
The deal is all but certain to be approved by Trump Media shareholders as Mr. Trump’s shares, which are held in a trust, are already pledged to vote for it. He is the company’s largest shareholder.
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