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Trump Media shares dropped to as low as $21.33, down more than
4%. The stock finished down 3.7% at $21.42, marking the eighth
consecutive session of losses.
Trump's dwindling lead in polls and election betting markets in
recent weeks has also hit the stock, which has been seen by some
retail traders as a bet on whether Trump would win a second
term.
"I've always looked at Truth Social and DJT as a voting
mechanism versus an investment mechanism," said Lou Basenese,
president and chief market strategist at MDB Capital in New
York. "The valuation never made sense in relation to the
fundamentals."
The stock had reached an all-time high of $79.38 during their
Nasdaq debut on March 26 following a merger with blank-check
company Digital World Acquisition Corp.
Earlier this month, Trump Media - whose main asset is the Truth
Social app - reported a quarterly loss of $16.4 million and
revenue of just $837,000. The company has a market value of
about $4.3 billion, down from over $8 billion earlier this year.
Trump is expected to be eligible to begin cashing out his nearly
60% stake - or 114.75 million shares - in his social media
company when the insider lockup period expires next month.
"It's always traded in line with his odds of winning or losing,
and that's what we're seeing now that the race is tight and the
probability of him winning has narrowed. And I think it's
hitting record lows also because you're coming up against the
insider lockup," Basenese added.
Trump began posting on the X platform last week for the first
time in nearly a year, coinciding with an interview with owner
Elon Musk.
Trump in recent weeks has lost his sizeable lead in polls
against Vice President Kamala Harris, the Democratic candidate.
With 78 days to go before the Nov. 5 vote, contracts for a
Harris victory are trading at 56 cents, with a potential $1
payout, on the PredictIt politics betting platform.
Trump contracts are at 46 cents, down from as much as 69 cents
in mid-July.
(Reporting by Chibuike Oguh in New York; Editing by Daniel
Wallis)
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