OUR TAKETrump’s decision to hold onto his shares in Trump Media & Technology Group is a strategic move to bolster investor confidence and stabilise the company’s stock price amid ongoing volatility. His commitment could be seen as an effort to reassure the market and maintain control over the narrative surrounding his media ventures.-Tacy Ding, BTW reporter
What happened
Republican presidential candidateDonald Trumpstated on Friday that he will not sell his shares in the company that owns his Truth Social platform when restrictions on selling are lifted in the coming days, causing the stock to rise following a recent selloff.
Shares ofTrump Media & Technology Group (DJT.O)surged by as much as 30% following his remarks, before ultimately closing with a 12% gain for the day.
Trump owns approximately 57% of Trump Media, whose shares experienced a decline this week following his televised debate with Democratic rival, Vice President Kamala Harris.
Friday’s surge in the stock follows weeks of consistent declines ahead of key dates this month, when Trump and other company insiders will be permitted to sell their shares.“No, I’m not selling,” the former president responded to a question posed by Reuters. “I’m not leaving. I love it. I think it’s great.”
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Why it’s important
Trump Media’s value soared to nearly $10 billion following its stock market listing in March. The company’s stock is popular among retail traders and is viewed as a speculative investment on Trump’s chances of winning a second four-year term as president.
However, since its listing, Trump Media shares have lost most of their value, with losses accelerating in recent weeks after President Joe Biden withdrew from the re-election race, and Trump lost his lead in opinion polls ahead of the 5th November presidential election.
According to provisions related to Trump Media’s listing, Trump and other insiders will be allowed to sell shares starting later this month, which could potentially flood the market with additional stock.
Trump Media’s revenue is roughly equivalent to that of two Starbucks (SBUX.O) coffee shops, and strategists suggest its $3.6 billion stock market valuation is disconnected from its actual day-to-day business. The company reported a loss of $869,900 in its most recent quarter, which ended on 30th June.
