Dilemma on the stock market The TV debacle has made Donald Trump significantly poorer

Donald Trump in a quandary: to fill his coffers, he would have to sell shares. But the share price of his media company is plummeting and fans could lose faith if their idol cashes in quickly.

Things are now getting pretty bad financially for Donald Trump: the Republican is losing a lot of money due to his defeat in the TV duel against Kamala Harris. The share price of his media company Trump Media & Technology Group (TMTG) has plummeted following his appearance on the stock exchange. According to the AFP news agency, the share price fell by 10.5 percent.

While Trump's shares were still worth eight billion US dollars in March, they have now fallen to less than two billion US dollars, "Watson" has calculated.

Putin buddy made Trump's IPO possible in the first place

Price fluctuations due to individual events may not be unusual. In an election campaign, they are certainly not: the US stock market sometimes shows significant swings, depending on how investors assess the candidates' chances. Individual companies can suddenly see very high gains - but also massive losses.

Donald Trump is now feeling the effects of this. The ex-president holds a majority stake in the media group named after him. The Trump Media & Technology Group went public in the spring with a trick, the merger with an empty shell company.

Interestingly, the IPO was made possible by a fintech guru with close ties to the Kremlin: Russian-American businessman Anton Postolnikov is the subject of an FBI investigation and is considered an ally of Putin. The British Guardian reported in the spring that he saved Trump Media from insolvency with emergency loans via a letterbox company in December 2021 and February 2022. It is unclear whether Trump and his entourage knew where the opaque loans came from.

Trump's fortune depends on his fans

At the time, it was important to go through with the IPO. With his shares in the Trump Media & Technology Group, Trump's fortune multiplied in one fell swoop on the first day of trading. This was despite the fact that Truth Social was part of the Group: the extremely loss-making social media platform made a loss of 18.7 million US dollars in the second quarter of 2024 alone.

Even worse for Trump than the quarterly figures, however, is the fact that investors are losing confidence in his election victory. The share price has fallen from USD 66 in March to below USD 16 (as at September 12). The share price was last on the upswing after the failed assassination attempt on the former president and during the Republican nomination convention. At that time, Trump was ahead of Biden in the polls and had the momentum on his side in the election campaign.

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Since Joe Biden's withdrawal and the nomination of Kamala Harris as the Democratic candidate, the share price has fallen. Nevertheless, the stock market valuation of TMTG - more than three billion US dollars - is still far too high for many experts. One reason for this is that the share is a so-called meme share, a gambler's stock with no real content that investors use to bet on the future. Or in Trump's case, more than 600,000 fans have chained their fortunes to Trump's political success.

Cashing in quickly would be too risky

For Donald Trump, the TMTG figures are so far just paper values, including the heavy losses caused by the plunge in the share price after the TV duel. He will not be able to buy any of his shares until next week at the earliest. A six-month lock-up period following the IPO will then expire. Due to several court cases, penalties and bail payments, and not least for his campaign coffers, Trump could certainly use some cash.

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So will he sell his shares as quickly as possible before the share price plummets further? It won't be that easy for Donald Trump. Rather, he faces a dilemma: simply cashing in would be quite risky. If he were to sell his shares quickly and thus increase the supply of shares, this could increase the pressure on the share price.

Not to mention that this step would send a less than positive signal to his electorate: Namely that the ex-president himself hardly believes in his re-election anymore. However, it could also be Trump's last chance to make any money at all with TMTG. Because if he loses the election in November, the share price will probably implode for good.