(Reuters) – Shares of Donald Trump’s media and technology company fell 12% on Monday, extending a sell-off that has now reduced the value of his stake in Truth Social’s operator to $2.9 billion .
Following its strong debut in late March, investors were unhappy with Trump Media & Technology Group after the company revealed millions of dollars in losses earlier this month and said it would struggle to cope to its financial obligations.
The company’s stock closed down 8.4% at $37.17 on Monday, a far cry from the record high of $79 it hit in its March 26 debut. It’s down about 40% so far in April.
The declines reduce a potential windfall for Trump who could sell his shares to raise money for his 2024 presidential campaign and legal fees, although lock-in restrictions for six months could prevent him from selling or borrowing against his actions.
Former US President Trump – who owns around 78.75 million shares in the company – saw the valuation of his stake fall by around $6 billion last month.
The market value of the entire Trump Media & Technology Group is now below that figure, at around $5.55 billion.
But the declines are good news for short sellers who have suffered heavy losses on the stock so far this year.
Trump Media & Technology Group has a short interest of about 4.75 million shares, or 12% of its float, according to analytics firm S3 Partners.
Monday’s drop means those betting against the stock made about $16 million in market profits, although those shorting the stock are still down 69% for the year.
“DJT’s recent price weakness has offset the enormous financing costs that short sellers are incurring and kept many of them in the trade,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
(Reporting by Priyanka.G in Bangalore; editing by Maju Samuel)
yahoo
