Trump Media & Technology Group (NASDAQ:DJT) saw its stock price drop over 10% on Tuesday following the company’s announcement of plans to launch a new live TV streaming platform.
The initiative, revealed in a press release, entails Trump Media’s launch of a live streaming service accessible via the Truth Social app on smartphones, tablets, and television devices. The content lineup is anticipated to include live TV channels encompassing news networks, religious programming, family-friendly content such as films and documentaries, and other content facing censorship or cancellation on alternative platforms.
After merging with special purpose acquisition company Digital World Acquisition Corp. and subsequently going public on the Nasdaq, Trump Media’s shares have experienced a decline exceeding 60% since the close of March.
The company’s stock took another hit on Monday following news of its intention to issue more than 21 million shares.
Former President Donald Trump holds approximately 60% of Truth Social’s parent company. With shares trading around $23.40, Trump Media’s market capitalization stands at roughly $3.2 billion, equating to a stake worth approximately $1.9 billion for Trump. Immediately after the company’s public debut, Trump’s stake was valued at just over $4.5 billion.
Trump established Truth Social after being banned from major social media platforms like Facebook and Twitter following the January 6 Capitol riots in 2021. While Trump has since been reinstated on these platforms, Truth Social emerged as an alternative.
A regulatory filing released earlier this month disclosed Trump Media’s sales of slightly over $4 million, alongside net losses nearing $60 million for the fiscal year ending December 31. The company anticipates ongoing losses amid heightened profitability challenges.
Stakeholders remain subject to a six-month lockup period before being permitted to sell or transfer shares. Any deviation from this lockup period would necessitate a decision by the company’s board, a move that analysts believe could prompt legal action from public shareholders.
Trump confronts a $454 million fraud penalty and contends with a fundraising deficit ahead of his anticipated 2024 election rematch against President Biden. A recent $175 million bond posting in the fraud case temporarily halts the final payment as Trump pursues an appeal.
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