Shares fluctuate as Trump Media reports losses, changes auditors, and warns investors of legal risks
Shares of Trump Media & Technology Group has experienced significant volatility at the opening bell Friday.
The stock fell sharply after initially appearing to recover despite the conviction of former President Donald Trump in his hush money trial, as reported by BNN Bloomberg.
A New York jury found Trump guilty of falsifying business records in a scheme to illegally influence the 2016 election through hush money payments to a porn actor who claimed to have had a sexual encounter with Trump.
After rising over two percent at the start of trade on Friday, shares slid seven percent, aligning with the levels seen immediately after the conviction was announced during off-hours trading on Thursday evening.
The stock, trading under the ticker symbol “DJT,” has been highly volatile since its debut in late March, joining the group of meme stocks that fluctuate dramatically as investors try to capitalize on upward momentum swings.
The stock has tripled this year, often experiencing double-digit percentage moves in a single day. It peaked at nearly US$80 in intraday trading on March 26. For context, the S&P 500 is up almost 10 percent year-to-date.
In a filing with the US Securities & Exchange Commission before going public, Trump Media warned investors about potential risks associated with the former president's legal issues, noting that an adverse outcome could negatively impact the company and its Truth Social platform.
Earlier this month, Trump Media reported a loss exceeding $300m in the last quarter, according to its first earnings report as a publicly traded company.
For the three-month period ending March 31, the company posted a loss of $327.6m, which included $311m in non-cash expenses related to its merger with Digital World Acquisition Corp. (DWAC), a special purpose acquisition company (SPAC).
Trump Media & Technology fired an auditor this month, BF Borgers, which federal regulators recently charged with “massive fraud.” The company dismissed the auditor on May 3, delaying the filing of its quarterly earnings report.
Previously, Trump Media had cycled through at least two other auditors—one resigned in July 2023, and another was terminated by the board in March, just before rehiring BF Borgers.
Trump faced 34 counts of falsifying business records at his company, linked to an alleged scheme to hide potentially embarrassing stories during his 2016 presidential campaign.
The charge arose from reimbursements paid to Trump lawyer Michael Cohen, who made a $130,000 hush money payment to porn actor Stormy Daniels to silence her claims of a sexual encounter with Trump in 2006.
Trump was accused of misrepresenting Cohen’s reimbursements as legal expenses to conceal their connection to the hush money payment.
Trump's defense argued that the payments to Cohen were for legitimate legal services.
