① DJT (Donald J Trump) media stated on Tuesday that Trump may not prioritize posting messages on his flagship product Truth Social. ② If this is true, the company has no effective remedy. ③ DJT's core business is Trump's active posting on Truth Social. Once he exits the stage, the company may revert to its original state.
On June 19, Caixin reported (Editor Malan) that while the US stock market welcomed Nvidia's ascend to the top of the global market cap, on Tuesday, the stock price of Trump Media & Technology Group (DJT) suddenly plummeted, dropping by a significant 10% by the closing bell, adding another example of its volatile narrative.
Since the end of May, since a New York jury convicted Trump of 34 counts of falsifying business records and more, the stock has fallen by a cumulative 39%.
DJT's decline on Tuesday is related to a warning issued by the company, claiming that it cannot force major shareholders (i.e. Trump) to support its flagship product - the social platform Truth Social, including priority posting on that platform.
But this has always been seen as a potential key point for DJT to turn things around, especially if Trump wins this year's US election, and as president, if he chooses to "govern the country online" on Truth Social, it will attract a large number of users and significantly increase the value of the product.
DJT's statement on Tuesday undoubtedly upset many investors, becoming the most direct trigger for this round of selling.
TikTok seems to be more popular.
Tuesday's sell-off coincides with the final deadline for DJT shareholders to exercise stock warrants. According to previous filings by the company, after shareholders exercise the warrants, the company will issue nearly 21.5 million common shares.
Later on Tuesday, DJT announced that the U.S. Securities and Exchange Commission had declared the stock warrants covered by the registration statement exercised. The announcement sent DJT's stock price down more than 13% in after-hours trading, showing strong selling sentiment among DJT shareholders.
Regarding Trump's collaboration with Truth Social, DJT emphasized that even if Trump Media and Trump himself have different ideas about using Truth Social or prioritizing content on the platform, the company cannot offer any meaningful remedy for the disagreement.
The company stated very bluntly that this situation could have a significant adverse impact on Trump Media's business and operations.
In June, Mr. Trump himself announced with great fanfare that he had joined the short video platform TikTok and attracted 6.4 million followers in just a few days, far exceeding the average monthly traffic on the entire Truth Social platform.
This huge flow prize undoubtedly made Trump attach great importance to TikTok, and in a subsequent video appearance, he firmly stated that if elected president of the United States, he would never ban TikTok in order to win the love of TikTok users.