Trump Media stock plummets, erasing all gains since debut

Shares of Trump Media & Technology Group (DJT) have experienced a significant decline, erasing all the gains the stock had made since the company went public in March. The stock, which had previously hit a high of $80 per share, has now fallen to approximately $37 per share.

Yahoo Finance's Rick Newman breaks down the details and highlights the company's 2023 annual report.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

Editor's note: This article was written by Angel Smith

Video transcript

JARED BLIKRE: Time for today's stock to watch. Shares of Trump Media, erasing all gains since its debut under the ticker symbol DJT in March. Now, the stock previously hit a high of nearly $80 back on March 26th, but now, it sits at about $37.50. Yahoo Finance's Rick Newman he joins us now for the breakdown. Rick, what's behind this?

RICK NEWMAN: Well, the market seems to be saying we're not so thrilled with this stock after all, and that comes after we saw the annual report for 2023 last week, I think it was, that showed $58 million in losses and revenue of only $4 million in 2023. Jared, I was talking with one CEO last week who said, that's not a business. $4 in revenue and $58 million in losses is not a business. So there was some enthusiasm about this company as a meme stock. And we've talked about this before air. This is basically a play on the 2024 election outcome.

If Trump wins, then the main property here, which is the Truth Social Network, could become the place where people are having important political conversations for the next four years. But if Trump loses, what's the point of this company? So it's almost a binary play on whether you think Trump is going to win or not in 2024. And there's one other interesting wrinkle here, which is there are not many shares available for short selling, which means that if there were more shares available, the short interest in this stock would probably be higher. And that means a couple of things.

I think number one, there should could be a short squeeze that pushes the price up for technical factors, not because of fundamental factors. But once this all settles out, if you can get to normal levels of shorting on this stock, there could be a lot more shorting by people who say this company has no future. So that could end up really affecting the price. Again, all driven by weird factors that don't have a lot to do with the fundamentals of this business.

SEANA SMITH: Certainly trading. Far from what the fundamentals are telling us. And Rick, really good point on short covering there and what that could really add to volatility down the line. All right. Rick, thanks so much.