(Bloomberg) — Trump Media & Technology Group Corp. has wiped out some $2.8 billion in value as some of the retail traders who frantically bid up the stock last month began to sell.
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The social media company that’s mostly owned by former president Donald Trump has slumped 37% from its close on March 26. The stock fell below the level it was trading at on March 22, when investors approved its tie-up with the blank-check firm, Digital World Acquisition Corp.
Trump Media, which owns Truth Social, had soared in its first days as a public company after the private firm merged with DWAC, what the shell company was known as.
But the stock, which trades under Trump’s initials DJT, has struggled to retain the attention of individual investors who bought shares as a way to support the former president in his 2024 reelection campaign.
As the stock slides, the paper windfall for Trump himself has dropped some $1.6 billion to roughly $2.9 billion. For Trump to benefit from the paper wealth, he’ll have to wait six months before he can sell shares under a lock-up agreement.
Read more: Trump Sues Truth Social Company Co-Founders to Zero Them Out
Trump Media has a market capitalization of nearly $5 billion even after the latest drop despite generating just $4.1 million in revenue last year. That heightened valuation has made it costly and risky to bet against the company, with short sellers facing annual financing costs of more than 450% to borrow the shares, according to brokerages.
Read more: Trump Media Is Now the Most Expensive US Stock to Bet Against
The fallout has shades of past meme stocks like GameStop Corp. and other so-called de-SPACs, companies that went public through blank-check deals, which saw initial swings in their stock performance before falling.
More than one-fifth of the nearly 500 SPAC deals that have closed since 2019 are trading below $1 each, representing a greater than 90% plunge. And dozens of them at times saw share prices surge in retail trader-fueled frenzies, meaning losses for some are far greater.
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