Why Trump Media & Technology Shares Lost 18% in September

Actions of Trump Media and Technology (DJT -2.17%) they were among the losers last month. Investors sold shares of Truth Social’s parent company pending the expiration of the lock-up period. That was expected to prompt insiders to sell the stock after what was widely seen as a lackluster debate performance by Donald Trump.

According to data from S&P Global Market Intelligence, stocks ended September down 18%. As you can see from the chart below, the stock fell further before recovering in the last week of the month.

DJT data by YCharts.

Trump Media continues to slide

Shares of Trump Media have continued to fall since it went public through a special purpose acquisition company (SPAC) merger in March.

The stock has historically moved in line with Donald Trump’s political outlook, as the business is negligible right now with quarterly revenue of less than $1 million and heavy losses.

One of the worst days of the Trump Media month came on September 11, the day after the presidential debate. Shares of Trump Media fell 10.5 percent on heavy volume as most pundits believed Vice President Kamala Harris won the debate.

However, shares of the Trump-branded company rose that Friday after Trump said he would not sell any of his shares even after the lock-up period expired. The stock gained 11.8% on the news, again in heavy volume trading.

In the following week, however, the stock fell each session in anticipation of the expiration of the lock-in period. Newly public companies often decline after the lock-up ends as insiders dump their stock, eager to take profits.

After falling for six straight sessions, Trump Media shares have gained more than four of the past five sessions, ending the month on the up.

Image source: Getty Images.

What’s Next for Trump Media Stock?

The presidential election is about to be one of the closest in history; a Trump victory would likely send the stock higher.

However, there is no guarantee that the venture will be successful. The company has made big promises, including launching a streaming service, but so far Truth Social has struggled to gain a critical mass of members, and Trump’s return to X (formerly Twitter) shows its copycat app hasn’t been the draw on which some of his followers might have hoped.

Expect the stock to continue to move with Trump’s political fortunes, but given the state of this business, this stock is best avoided, at least until it can demonstrate a path to profitability.