NEW YORK — Wall Street’s reaction to Donald Trump’s debate performance on Tuesday has been swift and harsh. Investors have quickly penalized Trump’s social media venture following his widely criticized performance. Shares of Trump Media & Technology Group tumbled 17% on Wednesday morning, hitting their lowest point since the company’s public debut in late March.
This sharp decline follows a debate where Vice President Kamala Harris effectively disrupted Trump’s performance. In stark contrast, on June 28, after President Joe Biden’s poor debate performance, Trump Media’s stock initially surged 10% before eventually closing in the red.
Trump Media has often served as a proxy for investors betting on Trump’s political prospects and his potential return to the White House. “The market perception is that Harris won the debate,” Matthew Tuttle, CEO of Tuttle Capital Management, told CNN, noting shifts in betting markets in Harris’ favor.
Trump, who not only dominates as the largest shareholder in Trump Media but is also the top user on Truth Social, has his stake closely tied to the company’s fortunes. The stock ticker symbol “DJT” reflects his central role.
Tuttle speculated, “If he loses, he might be forced to sell, and DJT could plummet to $1. If he wins, he won’t sell, and DJT could rebound.” The lock-up period preventing Trump from selling his 114.75 million shares is set to expire later this month. While this will allow him to sell some shares, experts believe it would be challenging for Trump to offload a significant portion without severely impacting the share price.
Michael Block, chief strategy officer and co-founder of AgentSmyth, suggested the selloff may be linked to investor reactions to Trump’s debate performance. “Given its lack of earnings and other measurable metrics, DJT is not a conventional growth or value investment. It’s a story stock, and investors might not have liked the story Trump presented,” Block said.
Despite a rally leading up to the debate, with Trump Media shares rising 9% in the first two days of the week, the stock has struggled overall in recent months, losing about half its value since Biden withdrew from the presidential race in July. The value of Trump’s stake in the company has dropped significantly, from $6.2 billion on May 9 to approximately $1.8 billion on Wednesday.