Trump Media Shares Plunge 15% After Harris Debate Win

Shares of Trump Media & Technology Group (TMTG) experienced a sharp decline on Wednesday, plunging over 15% and hitting a new record low. This drop followed Vice President Kamala Harris’s emergence as the betting favorite to win the upcoming election, a shift that came after her debate with former President Donald Trump. As Trump, the majority stakeholder in the parent company of Truth Social, took part in his second debate of the 2024 election season, the market reacted unfavorably. By mid-morning, TMTG shares fell below $15.75, nearing their previous all-time low of $16.70, recorded just a few days earlier on September 4.

Following the debate, several bookmakers favored Harris’s performance, leading to a shift in betting odds. The Election Betting Odds tracker, which consolidates odds from four different sources, gave Harris a 51.8% chance of winning. Meanwhile, the crypto-based betting platform Polymarket, which had previously leaned in Trump’s favor, now shows both candidates with nearly equal odds at 49%. This dip in the company’s stock value has also had a notable impact on the value of Trump’s stake in the company. Trump holds approximately 60% of TMTG’s shares, equating to around 78.75 million shares. The decline in stock price has reduced the value of his stake from $1.4 billion to $1.2 billion, marking a significant loss.

One major point of interest in the coming weeks is whether Trump will decide to sell some of his shares in Trump Media. Since the company went public in March through a reverse merger with a special-purpose acquisition company (SPAC), certain shareholders, including Trump, have been prohibited from selling their shares due to a lock-up period. This period is set to end as soon as September 19, provided TMTG’s stock price remains above $12. The end of the lock-up period could introduce more volatility in the stock, especially if Trump or other major shareholders opt to offload their shares, potentially driving the price lower.

Trump Media’s stock has been on a steady decline for several months. After hitting its peak value of $79.38 on March 25, the stock has dropped by 79%. The current low marks a dramatic fall from that high, and some analysts believe the company may continue to struggle due to concerns about its business model and Trump’s political uncertainties. The company has also faced financial difficulties, reporting a $16 million loss in its most recent quarter, which has further fueled skepticism about its valuation. Trump Media’s market cap has dropped significantly, falling from a high of nearly $10 billion in May to just over $3 billion by Tuesday.

Throughout Trump’s campaign, TMTG’s stock has been highly volatile, with shares rising and falling in response to his political activities and public appearances. For example, the stock surged by 13% following a debate between Trump and President Joe Biden, where some critics called for Biden to drop out of the race. Similarly, shares rose by 32% in mid-July, just days after an assassination attempt on Trump during a campaign rally in Pennsylvania. However, these temporary spikes have not been enough to offset the broader decline.

Investors and analysts alike are increasingly concerned about TMTG’s long-term prospects. While political developments have had a significant impact on the stock’s performance, the company’s financial outlook remains a central concern. Truth Social, the platform launched by Trump as a conservative alternative to Twitter (now X), has struggled to gain traction and compete with larger social media platforms. The company’s user growth and engagement have lagged, raising doubts about its ability to generate sustainable revenue.

As Trump Media approaches the expiration of the lock-up period, the potential for further stock volatility looms large. If Trump or other major shareholders decide to sell, it could create a wave of new selling pressure, further driving down the stock’s price. On the other hand, if Trump chooses to hold onto his shares and maintain confidence in the company’s future, it could signal to investors that he believes the stock has room to recover as the 2024 election progresses.

Looking ahead, the market will likely continue to react to both Trump’s political fortunes and the company’s financial performance. As Trump remains a central figure in American politics, any changes in his poll numbers, campaign events, or legal challenges could directly affect TMTG’s stock price. Additionally, investors will be closely watching for any signs of improvement in Truth Social’s performance or new revenue streams that could stabilize the company’s finances. However, with Trump Media facing ongoing losses and market skepticism, its future remains highly uncertain, and the path to recovery may be challenging.