When Trump Media began public trading in late March, its market value soared. But the company’s fortunes on Wall Street have taken a turn: This past week, its share price slipped to around $42, erasing more than $2.5 billion.
Here’s the latest →
Many investors are lining up to bet on Trump Media’s collapse via a practice known as “shorting.”
That method involves borrowing shares of a company and selling them into the market to buy them back later at a lower price, before returning the shares to the lender and pocketing the difference.
It is just the latest rough patch for Trump Media, the parent company of Truth Social — the digital platform that has become Donald J. Trump’s main outlet for reaching his supporters and attacking his critics — whose path to the stock exchange has been full of twists and turns over nearly three years.
Many of these challenges arose during the company’s efforts to complete a merger with a special purpose acquisition company, or SPAC, to help take it public. That process involved a Securities and Exchange Commission investigation, an $18 million penalty and a lawsuit involving two early founders of the social media company that made its way to Delaware Chancery Court.
Based on its trading pattern so far, Trump Media looks a lot like a meme stock. Those stocks — shares of companies whose investors may be influenced by the whims of social media — are volatile by nature.
Mr. Trump, however, the presumptive Republican nominee for president, may have larger worries on his mind. He recently had to post bonds in two separate cases, amounting to well over $200 million.
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