Why Trump Media shares fell to a new all-time low this week

Trump Media and Technology (NASDAQ: DJT) the stock fell again this week. The company’s share price ended the period down 12.3% from the previous Friday’s closing price, according to data from S&P Global Market Intelligence. The S&P 500 the index ended the week down 4.3%, and Nasdaq Composite the index ended the period down 5.8%.

Shares of Trump Media lost ground as growing fears that the U.S. economy could slide into a recession prompted a sell-off for the broader market. In addition to macroeconomic factors, the company’s share price has likely fallen due to competition from other social media platforms and the expiration of the insider share sales lockup that is due later this month.

Investors fear that economic conditions could turn sour

Bearish sentiment around the US economy increased this week. Tracking released Tuesday showed the country’s manufacturing sector contracted again in August, and Friday’s Labor Department report came in with weaker-than-expected results. The average Wall Street target was calling for 160,000 jobs to be added last month, but only 142,000 jobs were added in the period. The job growth numbers for June and July were also revised down.

The Labor Department data further raised concerns that the economy could be headed for recession in the not-too-distant future. Investors had hoped that the Federal Reserve’s anticipated interest rate cut this month would create macro-optimistic conditions for stocks, but these concerns could dash those hopes.

Trump Media shares hit new record low

Former President Donald Trump is the majority shareholder of Trump Media, and Truth Social is currently the centerpiece of the company. The social media platform has similarities to X, formerly known as Twitter. Trump was previously banned from Twitter, but his status was later reversed adze CEO Elon Musk acquired the platform.

Despite X being a competitor to Truth Social, Trump returned to posting on the rival platform to help his presidential campaign. While the former president still posts far more on Truth Social than X, being active on both platforms takes away some of Truth Social’s value proposition.

In addition to these concerns, investors also seem concerned that a large amount of shares will soon be sold on the open market. The lock-in period preventing insider sales is scheduled to expire on September 25, although it could happen five days earlier due to previously announced provisions. The company’s valuation could fall if Trump or other big insiders end up selling a large amount of stock, and that risk pushed shares of Trump Media to a new record low this week.

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Why Trump Media Stock Fell to a New All-Time Low This Week was originally published by The Motley Fool