Shares of Trump Media & Technology Group, the owner of social networking site Truth Social, slumped Thursday after former President Donald Trump was convicted in his hush money trial.
A New York jury found Trump guilty of falsifying business records in a scheme to illegally influence the 2016 election through hush money payments to a porn actor who said the two had sex.
Trump Media’s stock was down about 9% in after-hours trading Thursday as news of the verdict emerged.
The stock, which trades under the ticket symbol “DJT,” has been extraordinarily volatile since its debut in late March, joining the group of meme stocks that are prone to ricochet from highs to lows as small-pocketed investors attempt to catch an upward momentum swing at the right time.
The stock has tripled this year, in the process frequently making double-digit percentage moves either higher or lower on a single day. It peaked at nearly $80 in intraday trading on March 26. For context, the S&P 500 is up almost 10% year to date.
Earlier this month, Trump Media reported that it lost more than $300 million last quarter, according to its first earnings report as a publicly traded company.
For the three-month period that ended March 31, the company posted a loss of $327.6 million, which it said included $311 million in non-cash expenses related to its merger with a company called Digital World Acquisition Corp. DWAC was an example of what’s known as a special purpose acquisition company, or SPAC, which can give young companies quicker and easier routes to getting their shares trading publicly, but with much less scrutiny.
Trump Media & Technology fired an auditor this month that federal regulators recently charged with “massive fraud.” The media company dismissed BF Borgers as its independent public accounting firm on May 3, delaying the filing of its quarterly earnings report.
Trump Media had previously cycled through at least two other auditors — one that resigned in July 2023, and another that was terminated by its board in March, just as it was rehiring BF Borgers.
Trump was charged with 34 counts of falsifying business records at his company in connection with an alleged scheme to hide potentially embarrassing stories about him during his 2016 Republican presidential election campaign.
The charge, a felony, arose from reimbursements paid to then-Trump lawyer Michael Cohen after he made a $130,000 hush money payment to porn actor Stormy Daniels to silence her claims of an extramarital sexual encounter with Trump in 2006. Trump was accused of misrepresenting Cohen’s reimbursements as legal expenses to hide that they were tied to a hush money payment.
Trump’s defense contended that the Cohen payments were for legitimate legal services.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Fortune – https://fortune.com/2024/05/30/trump-media-stock-spirals-in-the-wake-of-fraud-verdict/
