Donald Trump has experienced a $357 million (£280 million) loss as shares in his social media company plummeted following his fraud conviction.
On Friday, shares in Trump Media and Technology Group (TMTG), which owns Truth Social, fell by 6%.
This drop reduced the company’s value by $550 million. Trump, who owns a 65% stake in Truth Social, saw a significant portion of his net worth impacted. His stake is valued at $5.6 billion, but he cannot sell any shares until September due to a lock-up agreement from the company’s initial public offering in March.
The decline in Truth Social’s shares was less severe than initially feared, as they had dropped by as much as 14% in after-hours trading immediately following the fraud verdict related to “hush money” payments to a porn star.
Truth Social, which operates similarly to X (formerly Twitter), was created after Trump was banned from Twitter following the US Capitol riots on January 6, 2021. It allows users to post short messages or “retruth” posts.
Elon Musk has since lifted the ban on Trump, who was once an active Twitter user. However, Trump continues to exclusively use Truth Social, where he has 7 million followers.
TMTG has indicated in regulatory filings that Trump’s conviction could “negatively impact” the company. Although Trump does not have a formal role at TMTG, a guilty verdict could make it more difficult for Truth Social to attract advertisers.
If Trump’s conviction affects his chances of regaining the White House, it could diminish the social network’s influence. Additionally, if Trump were to receive a prison sentence, he might be prevented from using the platform.
Observers have noted that the company’s valuation is largely disconnected from its financial performance, driven in part by retail shareholders who support Trump.
TMTG reported a loss of $327.6 million (£256.6 million) in the first three months of the year, with revenues of $770,500.
Despite Trump’s exclusive use of Truth Social, Musk is believed to have been in regular contact with the former president, encouraging him to return to X, where his account still has 87 million followers.
Musk’s company is reportedly planning to host a video town hall event with Trump in the lead-up to the November US election.
TMTG is led by Devin Nunes, a former Republican congressman and close ally of Trump. Donald Trump Jr. also sits on the company’s board.
