Trump Media & Technology Group’s Stock Tumbles as Company Announces New Stock Offering

Trump Media & Technology Group’s stock is facing another tumble as the company announces a significant increase in shares. The struggling company, owned by former President Donald Trump, is in dire need of funds to stay afloat, leading to the decision to offer 21.5 million new shares for sale.

However, this move comes with a downside as it would devalue existing shareholders’ stakes, including Trump’s. The stock has already plummeted more than 60% from its peak on March 26, causing a significant dent in Trump’s net worth, which has dropped from $5.2 billion to about $2.3 billion.

Despite the steep decline in stock value, experts believe that the stock’s movement based on this latest update will likely be temporary. Matthew Tuttle, CEO of Tuttle Capital Management, acknowledges that while the decision to sell more stock may upset shareholders, it is a necessary step for the company’s survival.

The association of Trump with the company has attracted scrutiny, leading to volatile swings in the stock price. Experts have warned retail investors to be cautious when trading the stock, as the company lacks the fundamentals to support its high valuation. Trump Media reported a loss of $58 million in 2023 and generated only $4.1 million in revenue.

Trump currently owns over 57% of the company’s shares, but unless he purchases stock in the new offering, his ownership will decrease to just under half of the company’s publicly traded stock. The company’s financial struggles, minimal revenue generation, and loss of users have raised concerns about its ability to continue operating.

While the share offering is not directly related to Trump’s ongoing legal proceedings, the company has warned potential investors that any adverse outcome in Trump’s legal battles could negatively impact the company’s reputation and brand. The company’s future remains uncertain as it navigates through financial challenges and legal uncertainties.