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Trump Media & Technology Group stock has been on a downward trend for weeks, hitting new low after new low for much of August. As the markets opened after Labor Day weekend, Trump Media sunk even further.
Shares of Trump Media, the company behind former President Donald Trump’s Truth Social, dropped more than 8% Tuesday afternoon to a new post-merger low of $17.72. Since its debut on the Nasdaq on March 26 under the ticker DJT, the company’s market value has plunged nearly 69%.
On Friday, the company’s stock fell below $20 for the first time since going public.
This comes with the approaching end of the six-month lockup period, which required Trump to hold onto his shares for 180 days following its merger with Digital World Acquisition Corp., a special purpose acquisition company, or SPAC, on March 25. This will allow the former president to sell his stake in the company for a considerable profit, dependent on the value of the shares at the time of the sale.
There didn’t appear to be any business-related driver behind Tuesday’s dip. Analysts have likened DJT to a “meme stock,” like GameStop, AMC, and Reddit, because of the way its shares are traded largely on sentiment rather than the company’s actual operating results or prospects.
At the height of the hype just after its debut, Trump Media had a market value of roughly $8 billion — more than double the $3.69 billion market capitalization it currently has.
In recent weeks, the stock has also been seen as a proxy for the Republican presidential candidate’s election odds and performance, with investors trading shares to express their support for Trump at the peak of the election cycle. Trump holds 114.75 million shares in Trump Media, or about 60% of the company’s outstanding common stock.
Morningstar vice president of research John Rekenthaler previously told Quartz that he would expect Trump Media stock to “go to zero or something close to it” if Trump were to lose the November election against Democratic nominee and Vice President Kamala Harris.
Much of Trump Media’s market success has been dependent on the company’s connection to the former president. The company itself has said in regulatory filings that its “success depends in part on the popularity of its brand and the reputation and popularity of” Trump, and that “adverse reactions to publicity relating to [Trump], or the loss of his services, could adversely affect TMTG’s revenues and results of operations.”