Shares of Trump Media & Technology Group (DJT) continued to fall on Tuesday after falling 18% on news that the parent company of Donald Trump's social media platform Truth Social archived to issue more than 21 million shares.
The stock fell to $26.61 on Monday, continuing last week's sell-off, and fell another more than 2% in premarket trading. The move highlighted the stock's volatility since Trump Media subsequently went public to combine with Digital World Acquisition Corp in late March.
Last week, shares fell more than 20% in one day after a updated registration dossier of the company showed that Trump Media suffered heavy losses and faced “greater risks” related to the former president's ties to the platform.
Trump Media said in its latest filing that more than 21.4 million shares will be issued upon the exercise of warrants arising from the merger with a special acquisition company Digital World. Warrants allow holders to purchase shares at a specific price and are often tied to SPAC deals.
The company also said it is recording the resale of 146.1 million shares “by the selling security holders.” More than 114 million of these are owned by former President Donald Trump.
Last week Trump Media reported revenues of just over $4 million, while net losses were nearly $60 million for the full year ended December 31. The company warned that it expects losses to continue amid heightened profitability challenges.
“TMTG has historically suffered operating losses and negative cash flows from operating activities,” the filing said.
“TMTG expects to continue to incur operating losses and negative cash flows from operations for the foreseeable future as the company seeks to expand its user base and attract more platform partners and advertisers.”
Truth Social has amassed approximately 9 million users since its inception. The company noted that its success largely depends on the “reputation and popularity” of Donald Trump.
“TMTG may be subject to greater risks than typical social media platforms due to the focus of its offering and President Trump's involvement,” the company said, citing risks such as the harassment of advertisers and criticism of Truth Social's moderation practices.
“The value of the TMTG brand could decline if President Trump's popularity were to suffer.”
The former president founded Truth Social after being kicked off major social media apps like Facebook (META) and Twitter, the platform now known as platforms.
The stock rose to $66.22 per share on March 27. Before the bell on Tuesday, shares were hovering just below $26 each.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X @ines_ferre.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her
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