As the S&P 500 continues its upward momentum, Donald Trump’s media company, Trump Media & Technology (DJT), is facing a significant decline. Since reaching its peak on March 27 of this year, shares have plunged a staggering 75%. Wiping out approximately $9.8 billion in market value. For investors who believed in the media enterprise, this loss represents a brutal financial hit. This data, compiled from S&P Global Market Intelligence and MarketSurge, illustrates just how hard this stock has fallen.
While the overall stock market continues to perform well, Trump’s media company has struggled, underperforming as the broader S&P 500 index shows gains. Even major institutional investors like Vanguard and BlackRock have absorbed part of these significant losses.
Kamala Harris’ Entrance Intensifies the Downturn
The decline of Trump’s media stock only deepened after Vice President Kamala Harris officially entered the presidential race on July 21. In the weeks following her announcement, DJT shares saw a further decline of 54%. This drop resulted in an additional $3.7 billion loss for investors, exacerbating the company’s already severe financial strain.
The timing of Harris’ entrance into the political arena coincided with increasing market volatility for Trump Media & Technology. Analysts suggest that the public perception of Harris’ strong candidacy has negatively impacted Trump’s business prospects. According to Bespoke Investment Group, betting markets quickly favored Harris following the debate, leading to a market shift. Before the debate, Trump held a slight edge with a 50.6% chance of winning in November. But that reversed shortly after the debate, with Harris’ odds climbing to 51.7%.
Who Is Losing the Most?
As the largest stakeholder in Trump Media & Technology, Donald Trump himself has been hit the hardest. His personal stake in the company accounts for roughly 59% of its total shares. Since the company’s high point in March, Trump’s losses have reached $5.7 billion. With Harris’ announcement, Trump has personally lost an additional $2.2 billion in the stock market.
Institutional Investors Also Face Significant Losses
Although Trump himself carries the majority of the losses, other investors are also facing substantial hits. United Atlantic Ventures, which holds around 3.9% of the company, has seen its position shrink by $377 million since the stock’s peak.
It’s not just venture capital firms feeling the pain. Major asset managers, including Vanguard and BlackRock, also hold positions in Trump’s media company. While their stakes are relatively small, the losses are still noticeable. Vanguard, for example, holds a 1.5% stake, with much of it through its Vanguard U.S. Momentum Factor ETF (VFMO). Even though the Trump Media stock represents less than 0.1% of the ETF’s holdings. The value of Vanguard’s position has dropped by $144 million.
Similarly, BlackRock has also taken a hit. Through its iShares Russell Mid-Cap Growth ETF (IWP), BlackRock holds about 2.2 million shares of Trump Media, representing a 1.1% stake in the company. This position has decreased by $110 million since the stock reached its high.
Stock Market Divergence: Trump Media vs. the S&P 500
While Trump Media continues its downward spiral, the broader U.S. stock market tells a very different story. The S&P 500, which serves as a benchmark index for U.S. equities, has gained nearly 7% during the same period when Trump Media’s stock fell by 75%. The S&P 500 is now within 2% of an all-time high, further emphasizing the stark contrast between the two.
Despite Trump’s assertion that the U.S. is a “failing nation,” the performance of the stock market indicates otherwise. The stock market’s resilience, despite political turbulence, highlights how some sectors and companies continue to thrive while others, like Trump Media & Technology, flounder.
Is Trump Media a Good Investment?
The performance of Trump Media stock has caused some investors to question whether it remains a viable investment. Analysts such as Matthew Tuttle, CEO of Tuttle Capital Management, argue that the company’s fundamentals are weak. And if it weren’t for Trump’s association, the stock would likely be trading much lower. “If this wasn’t Trump, this thing would be trading at $1,” Tuttle said in a recent interview.
Other investors, including billionaire Barry Diller and LinkedIn co-founder Reid Hoffman, have voiced similar concerns. Diller famously called those buying Trump Media stock “dopes,” while Hoffman remarked that the company’s valuation was “absurdly out of the realm of normal.” Both Diller and Hoffman are prominent Democratic donors, adding a political dimension to their critiques.
Future Challenges for Trump Media
One of the major challenges for Trump Media going forward is political uncertainty. The company’s stock price has shown to be highly correlated with Donald Trump’s political prospects. When Trump is polling well, the stock stabilizes, but when he faces political headwinds, the stock tanks. For instance, when polls showed Vice President Harris gaining ground in the 2024 election race. Trump Media saw an immediate decline in its value.
Upcoming Stock Sales Could Add More Pressure
Another looming issue for Trump Media is the expiration of the lock-up period, which prevents Trump and other insiders from selling their shares. As of September 20, these restrictions will be lifted, potentially flooding the market with additional shares if insiders choose to sell. While some investors may see this as an opportunity to buy at a lower price, others are wary that large insider sales could further depress the stock price.
Conclusion: The Road Ahead for Trump Media Investors
Investors in Trump Media & Technology face a tough road ahead. While the company still holds over $300 million in cash, and is attempting to grow its streaming service Truth+, the stock’s performance paints a bleak picture. With Trump’s political future uncertain and the company’s financial fundamentals weak, many investors are left questioning whether the stock will recover.
The potential for recovery remains tied to Trump’s fortunes in the upcoming election. If he succeeds, Trump Media could regain some of its lost value, but if he fails, the company’s long-term viability will be called into question. Investors, even Trump supporters, would be wise to approach this stock with caution, separating their political views from financial reality.
