Trump Media’s 69% Plunge Wipes Out Billions Before Lockups End

The spiral is happening as retail traders grapple with the Republican presidential candidate’s return to X after using his own platform for years. In addition, Trump’s opponent, Vice President Kamala Harris, is showing momentum in recent polls. Real Clear Politics has Trump polling at 46.2 nationally down from a high of 48.1 on July 29, while Harris is up to 48.1 from 46.2 when President Joe Biden dropped out of the campaign.

For Trump, the stumble wipes out more than $3.7 billion from the former president’s paper profit off the deal, falling from a high of almost $5.8 billion to roughly $2 billion. And it delivers over $200 million in paper profits to short sellers who’ve bet against the company since its July 15 peak, data from analytics firm S3 Partners show.

The stock, which trades under Trump’s initials and went public in March through a blank-check merger, is now below where the special-purpose acquisition company traded at before Trump’s success in the Iowa caucuses in January kickstarted a 193% surge in just six sessions.

“Anybody who looks at this knows that the current price of the stock has no relationship to the underlying value of the company,” said Brian Quinn, a law professor at Boston College. “Until recently it’s been nothing more than a financial indicator of MAGA loyalty.”

Even with the selloff, Wall Street sill sees Trump Media’s valuation as lofty considering it lost more than $16 million in the second quarter while delivering less than $1 million in revenue. It has struggled to establish a modest user base, according to third-party trackers, while Trump’s return to his preferred mouthpiece, X, has busted the bull thesis some investors had pitched.