Trump Media & Technology Group’s stock is tumbling again after the company announced a massive new influx of shares. The struggling company is rapidly losing money, and a new stock offering could help it stay afloat.
But there’s a downside to going back to the market with new shares: A new public stock offering of 21.5 million shares announced Monday would add more than 15% more stock to the publicly available shares of the Truth Social owner. That would substantially devalue existing shareholders’ stakes — including that of former President Donald Trump.
Shares of TMTG (DJT) fell more than 15% Monday. The stock had rocketed higher in recent months in anticipation of merging a blank-check acquisition company with Trump’s media business. But it has lost more than 60% of its value from its peak on March 26, the day after the merger was completed and it started trading publicly as TMTG.
I don’t disagree. There is definitely some level of detachment from reality on many stocks. His is more detached than the rest but that doesn’t mean the fundamentals predict its reality. I also don’t doubt it would be a perfect vehicle for anyone to lobby his influence. But before/if he gets in, this baby is going to see the floor. Don’t know if the Saudis or Russia would want to put up the billions to prop it up just hoping he gets in.