Trump Media & Technology Group Corp (DJT) stock has been falling since the IPO, but why? | Invezz Trump Media & Technology Group Corp (DJT) stock has been falling since the IPO, but why?

On March 26^th, the Nasdaq stock exchange welcomed a splashy new SPAC debut: Trump Media & Technology Group Corporation (DJT).

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The company behind Truth Social, the Trump social media alternative to X, did a roaring trade. Its share price rose more than 16% on its first day of trading, and another 14% the following day. Opening at a price of $49.95 per share on March 26^th, the stocks surged to a high of $79.38 on the 26^th and were still worth over $70 each by March 28^th.

All in all, the stock price skyrocketed over 40% in its first two to three days trading on the Nasdaq.

A fall of over $13

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But that was then. Late yesterday afternoon during the New York trading session, DJT shares fell more than 10% to trade at just $36.44 by markets’ close.

This represents the stock price falling approximately 37% since its Nasdaq debut, with the DJT stock price having plummeted more than $13 from its original price of $49.95.

In fact, today, DJT stock price was down 8.43% today, nearly $4 per share, before US and European markets even opened.

Why has the DJT stock price tumbled?

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There are three likely contributing factors to the Trump Media fall from grace. This first is the company’s shaky financials, which revealed to America’s Securities and Exchange Commission (SEC) last week that the company had saw just $4.13 million in revenues last financial year, which were dwarfed by over $58 million in net losses.

This eroded investor confidence and started a selloff on Friday April 5^th, which only gathered steam after the second likely contributor: an ill-timed TV interview.

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On Sunday April 7^th, Trump Media & Technology Group CEO Devin Nunes appeared on Fox News to promote the company. Nunes did not mention the disclosure to the SEC, which was then public knowledge, but instead insisted to Fox News’ Maria Bartiromo that the company was debt-free and “had $200 million in the bank”.

Nunes also mentioned that DJT’s SPAC attracted 400,000 retail shareholders and that the company “thinks they’ve added another 200,000 retail investors”.

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This last admission is, according to journalist Jill Filipovic, telling – that the company is propped up by individual investors rather than big institutional investors who have seen DJT as a sound company to back.

Filipovic in an opinion piece for CNN, said that:

The market seems to be slightly correcting for reality. By Monday afternoon, Trump Media’s valuation had fallen to 8.8 billion. But the company, experts say, remains wildly over-valued. And that’s largely because Trump’s conservative fans are buying stocks because they like the man and believe his claims, not because the company is any sort of objectively good buy.”