Want to know how Donald Trump's presidential campaign is going? There's a ticker symbol to tell you just that.
Trump's new company, Trump Media & Technology Group (DJT), has become a kind of tracking stock that predicts the fate of the former president's political career. DJT, as it is known, is supposed to be an alternative media company that reflects conservative viewpoints. But above all, it's a binary bet on Trump himself and his 2024 presidential bid.
Both Trump's ventures as a company and Trump as a candidate have weathered downturns. President Trump is currently mired in the first of four criminal trials on his record, with jury selection underway in a Manhattan courtroom. The case will determine whether President Trump illegally falsified his business records when he paid “hush money” to cover up his affair with porn actress Stormy Daniels in 2016. .
While those who voted for President Trump may scoff at the charges, the trial could still damage the president. New York state law requires his presence, which means there will be less politics in the campaign. The boisterous Trump has to sit mostly restrained while others speak, and his usual rants are either end-of-day proclamations or overnight tweets to truth social platforms. Reduced to a post. The optics are poor, and Trump is usually hunched over a table, grimacing at the judge. On the first day, a man who mocked President Biden as “Sleepy Joe” reportedly nodded his head.
The trial could last six to eight weeks, a long period on the sidelines for a presidential candidate. Trump's legal troubles have not hurt his popularity among his core supporters, but every day in a hostile public environment that Trump has no control over, Trump is faced with a growing number of unstable voters who will decide November's election. This is an opportunity to distance yourself. The only advantage for Trump is that cameras cannot film the proceedings, so he can deny embarrassing developments and email fanciful accounts of his accomplishments in court to his supporters.
President Trump's media company reflects the candidate's personal malaise. The stock price soared in late March when it went public through a merger with a special purpose vehicle. But market enthusiasm quickly waned, with the stock falling 65% from its peak in just three weeks of trading. Trump owns 57.6% of his shares, which means the value of his stock has fallen from $5.3 billion to about $1.8 billion.
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The more investors know about Trump's company, the less they like it. The first negative news came as the company released its 2023 financial report, revealing a loss of $58 million on modest revenue of $4 million. The company subsequently announced plans to issue new shares and dilute the value of existing shares. On April 16, the company announced that it would roll out a streaming platform, causing the stock to fall further.
Some of DJT's shareholders are Trump fans, and they invested not as a principled investment but as a way to support Trump. The Washington Post recently profiled several of them, including some who are worried about losing money and others who believe President Trump is making a big move. Media mogul Barry Diller called such investors “dope.”
Everyone has known for months, perhaps years, that President Trump would face legal challenges and even face jail time. Trump Media & Technology Group itself has acknowledged that its president's legal issues could put the company at risk. “An adverse outcome in one or more legal proceedings could adversely affect TMTG,” the company's SEC filing states. Investors who believe in President Trump's mythical invincibility are learning that the market can kill anyone.
Is it possible to change direction? of course. Trump may win the Manhattan trial and plead not guilty. None of the other three criminal cases appear likely to go to trial before the election, and an acquittal in Manhattan would allow Trump to campaign as a free man.
September will be a big month for Trump Media & Technology. At that time, Mr. Trump and other insiders will be able to sell their shares. If President Trump were to step down, the market would see his stock price plummet as a sign of his lack of confidence in his policies, and stocks would likely fall further. If he believed that, there would be less reason to panic.
Next comes Election Day 2024, which may be the most important date on the company's calendar. If Trump wins the presidency a second time, we would be bullish on the stock, assuming he continues to post on his Truth Social. Although it is currently a fringe social media site, everyone who joins Trumpworld could be forced to participate and become a kind of quasi-government mouthpiece.
If Trump loses, the company could go bankrupt. It would be the end of the political career of the 78-year-old Trump, who lost twice to Biden. He intends to remain on the ground as the godfather of the Republican Party for as long as possible, but there is no obligation to follow his posts or activities. The company exists to promote Trump himself, and it seems likely that it will decline if or when Trump fades from prominence.
Opinion polls show Trump and Biden in a close race, with Biden gaining some momentum recently. By fall, DJT's stock price will tell us who is leading in the polls. That's probably better for the company than proving its mettle as a business.
Rick Newman is a senior columnist in the United States. Yahoo Finance. Follow him on Twitter @rickjnewman.
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