Trump Media stock tumbles post-conviction amid share dilution

The former president’s media company has seen a share price crash following his May 30 felony conviction for falsifying business records to hide hush money payments, but a recent move to dilute existing shares plunged the stock even lower.

A poisonous message to existing investors in a Tuesday filing, that the SEC had green-lit the firm to create and sell more than 14 million new shares, sent the price tumbling.

The Truth Social parent company went public in March, revealing its 2023 revenue of $4.1 million and losses of $58.2 million, climbing to a peak valuation of over $66 per share that month. 

Shares were trading well over $50 in the days leading up to the verdict before 12 jurors found Trump guilty on all 34 counts of the charges stemming from his attempts to cover up an affair. Losing nearly a third of its valuation, Trump Media pushed forward on its April plan to print more shares.

Today, shares sit at just over $25, down over 25% since Tuesday morning.

The move, which diluted existing investors’ holdings in the company, enables the organization to collect, per their estimate, just under $250 million from stock sales. Trump Media plans to use that new cash to grow its holdings, it says.

“With our S-1 declared effective, we’re expecting to be well positioned to energetically pursue TV streaming, other enhancements to the platform, and potential mergers and acquisitions,” Trump Media CEO Devin Nunes wrote in an announcement.

Trump Media has been closely tied to the former president’s net worth, with the $3-6 billion stake reportedly making up over half of his wealth. As the largest individual investor in the group, he is especially sensitive to price fluctuations.

Trump Media, and Trump’s holding in it, were mired in speculation from the group’s start, holding associations with a fraudster accounting firm and bucking charges that it serves merely as a cash-funneling service for the former president’s allies.