The stock price of Trump Media, which owns the Truth Social app, plummeted by nearly 20% over the course of the week, marking a significant decline in value. Despite an initial drop of over 8% in trading on Friday, the shares managed to slightly recover by the end of the day, closing with a modest increase of 0.5%. However, this closing price was still considerably lower than the company’s initial public offering price, leading to a total drop of 47.4% in April and a loss of billions in market capitalization.
Former President Donald Trump, the largest shareholder in Trump Media with nearly 60% of its stock, is currently facing a criminal trial in Manhattan Supreme Court. The company’s market capitalization has drastically decreased from its peak of $9.5 billion to $4.45 billion by the end of the week, following Trump Media’s merger with Digital World Acquisition Corp. Short sellers have shown interest in the company due to its low revenue and high stock price, with short interest totaling $208.7 million and just under 100,000 shares available for borrowing. Financing costs for short trades in Trump Media have fluctuated, reaching up to 900% a week ago before dropping to 200% recently.