Company shares have dropped by 47.4% in April so far
The shares of Trump Media, a media and technology firm, were found to have dropped by nearly 20% for the week, as reported in an article by CNBC.
The firm’s DJT shares only had a 0.5% increase following its drop by more than 8% in the previous week. It was now at $32.59 per share, which was lower than the shares it first sold when it began public trading on March 26.
In April, the company’s shares have dropped by 47.4%, which meant that it lost billions of dollars in its market capitalization. Its market cap stood at $4.45 billion on Friday, which was significantly lower than the $9.5 billion seen on its first day of trading.
In the previous year, Trump Media earned a revenue of only $4.1 million with a net loss of $58 million, which has drawn the interest of short sellers. Managing Director of Predictive Analytics at S3 Partners Ihor Dusaniwsky said that the firm saw the short interest in DJT reach $208.7 million with 5.44 million shares shorted this week.
Trump Media had less than 100,000 shares that were available to borrow in order to sell short. With the firm having 136.7 million outstanding shares, traders who wanted short Trump Media shares needed to pay up to 900% in annual financing costs, according to Dusaniwsky.
This mean that they needed a $30 per share drop within a month in order to break even. However, financing costs for short trades in Trump Media fell to 200%.
Notably, former US president Donald Trump is the firm’s biggest shareholder as he owned almost 60% of its stock. The firm was launched following his ban from the social media giant X, which was previously referred to as Twitter.
Trump is set to begin jury selection for his criminal trial due to charges of falsifying business records that were related to a transaction with porn star Stormy Daniels in 2016.
