Former President Donald Trump has been found guilty in hush money case. This verdict is affecting not only his presidential election campaign but also business. Shares of Trump Media & Technology Group, the parent company of social networking site Truth Social, tumbled on Thursday after his conviction.
A New York jury found Trump guilty of falsifying business records in a scheme to unlawfully influence the 2016 presidential election through hush money payments to a porn actor who alleged a sexual encounter with Trump.
As a result of the verdict, Trump Media’s stock, trading under the ticker symbol “DJT,” dropped about 9% in after-hours trading on Thursday.
Since its debut in late March, Trump Media’s stock has shown extreme volatility, often characterized as a "meme stock" due to its tendency to swing sharply in value as small investors attempt to capitalize on short-term gains. The stock hit an intraday peak of nearly $80 on March 26.
In contrast, the S&P 500 has risen almost 10% year-to-date.
Earlier in May, Trump Media disclosed loss exceeding $300 million last quarter, according to its first earnings report as a public company. For the quarter ending March 31, the company reported a loss of $327.6 million, largely attributed to $311 million in non-cash expenses related to its merger with Digital World Acquisition Corp (DWAC).
DWAC, a special purpose acquisition company (SPAC), provided a faster route for Trump Media to go public but with less regulatory scrutiny.
Compounding its financial troubles, Trump Media recently fired its auditor, BF Borgers, following federal charges against the firm for "massive fraud." The dismissal on May 3 led to a delay in filing its quarterly earnings report. Trump Media has 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.
