A New York jury found Trump guilty of falsifying business records as part of a scheme to illegally influence the 2016 election through hush money payments to a porn actor who alleged a sexual encounter with him.
Upon news of the verdict, Trump Media's stock, traded under the symbol "DJT," experienced a nine per cent decrease in after-hours trading. This drop comes after the stock had been highly volatile since its launch in late March, with fluctuating highs and lows as retail investors sought to capitalize on momentum swings.
On March 26, the stock reached nearly US$80 in intraday trading.
In its initial earnings report as a publicly traded entity earlier this month, Trump Media reported a loss exceeding US$300 million for the last quarter. For the first three months ending on March 31, the company recorded a loss of US$327.
6 million, which included $311 million in non-cash expenses related to its merger with Digital World Acquisition Corp., a blank-check company known as a special purpose acquisition company (SPAC) that facilitates quicker public trading for young companies with less scrutiny.
Trump Media & Technology also made headlines recently for terminating an auditor who had been charged with "massive fraud" by federal regulators.
The company dismissed BF Borgers as its independent public accounting firm on May 3, leading to a delay in filing its quarterly earnings report. This move came after Trump Media had already gone through at least two other auditors, with one resigning in July 2023 and another being terminated by the board in March, coinciding with the re-hiring of BF Borgers.
The charges against Trump in the hush money trial were related to an alleged scheme to conceal damaging stories during his 2016 presidential campaign.
He faced 34 counts of falsifying business records at his company, stemming from reimbursements made to his lawyer Michael Cohen after a US$130,000 hush money payment to Stormy Daniels, a porn actor who alleged a 2006 sexual encounter with Trump. Trump was accused of misrepresenting Cohen's reimbursements as legal expenses to conceal their connection to the hush money payment.
During the trial, Trump's defense argued that the payments to Cohen were for legitimate legal services.
However, the jury ultimately found Trump guilty of falsifying business records in connection with the hush money scheme.
The conviction of a former U.S.president is a significant event that is likely to have further implications for Trump Media & Technology Group. The company's stock price may continue to be affected by developments in the legal proceedings against Trump and any potential fallout from his conviction.
Investors and analysts will be closely watching the impact of Trump's trial on Truth Social and the wider Trump Media organization.
The company's ability to attract users and generate revenue through its social networking platform may be hindered by negative publicity surrounding Trump's criminal conviction.
In conclusion, the conviction of former president Donald Trump in his hush money trial has had immediate repercussions on the stock price of Trump Media & Technology Group. The company's financial performance and overall business prospects may be influenced by ongoing legal challenges and negative publicity stemming from Trump's criminal conviction.
Investors will need to carefully monitor developments in order to assess the long-term impact on the company's operations and stock performance.
3 months ago
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English (US)