Donald Trump’s social media stock closes at a record low after his rocky debate performance
By Matt Egan, CNN
New York (CNN) — Wall Street sure is acting like Donald Trump lost the debate Tuesday night.
Investors swiftly penalized Trump’s social media business following the former president’s widely panned debate performance. Other so-called Trump trades, including bitcoin and Coinbase, went into reverse Wednesday, while bonds and Asian currencies rallied. And some funds that own solar and other clean energy stocks rose sharply.
Shares of Trump Media & Technology Group plunged 17% Wednesday to the lowest level since the Truth Social owner went public in late March, before ending the day at a record low, down 10%.
The sharp selloff represents an immediate reaction to the ABC presidential debate, where Vice President Kamala Harris successfully threw Trump off his game.
It’s the exact opposite of the reaction in Trump Media’s share price on June 28 after President Joe Biden’s disastrous performance in the CNN debate. Trump Media initially spiked 10% that day, before fizzling and ending in the red.
Trump Media has at times become a way for traders to bet on the political fortunes of Trump and the chances he returns to the White House.
“The perception in the market is she won the debate,” Matthew Tuttle, CEO of Tuttle Capital Management, told CNN on Wednesday, pointing to shifts in Harris’ favor in the betting markets overnight.
Trump is not only the dominant shareholder in Trump Media, he is the most popular user on Truth Social, the company’s only significant product. The company’s stock ticker symbol is even “DJT.”
“I think if he loses, he has to sell and DJT goes to $1. If he wins, he doesn’t sell and DJT can make a run for it,” Tuttle said.
The lock-up restrictions preventing Trump from selling his 114.75 million shares in Trump Media are set to expire later this month. The lifting of the lock-up agreement will free Trump to sell some shares, but experts say it would be almost impossible for the former president to quickly unload most or all of his stake without tanking the share price.
Michael Block, chief strategy officer and co-founder of AgentSmyth, told CNN that Trump Media’s selloff Wednesday appears to be related to what investors saw during the debate.
“Given its lack of earnings and other quantifiable metrics, DJT is not exactly a traditional growth or value play for investors,” Block said in an email. “DJT is a story stock and perhaps investors didn’t like the story that President Trump was telling the world last night.”
Trump Media’s share price rallied heading into the debate, jumping 9% during the first two days of this week.
But in the bigger picture, the stock has struggled badly in recent months, losing about half its value since Biden dropped out of the race for the White House in July. The owner of Truth Social fell last week to the lowest level since it went public in late March.
The value of Trump’s stake in the company has fallen sharply, going from $6.2 billion on May 9 to about $1.9 billion on Wednesday.
The-CNN-Wire
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