By Medha Singh
(Reuters) -Shares of Trump Media & Technology Group fell about 5% in choppy trading on Friday, after a jury found former U.S. president Donald Trump guilty of falsifying documents to cover up a hush money payment to a porn star.
The stock opened higher and was among the top trends on Reddit’s discussion forum WallStreetBets, indicating strong interest from individual traders. A majority of the firm’s 621,000 shareholders are retail investors, as of April 29, the company has said.
“It’s a meme stock that has no fundamentals. The volatility today is not surprising,” said Art Hogan, chief market strategist at B. Riley Wealth.
The Republican presidential candidate for this year’s election owns a majority stake in TMTG, the parent of his social media platform, Truth Social. The company also provides a way for Trump supporters to bet on his resurgence as a political figure.
The 12-member New York jury pronounced Trump guilty on all the 34 felony counts he faced for falsifying business records to cover up a payment to porn star Stormy Daniels ahead of the 2016 election, making him the first United States president to be convicted of a crime.
The broader market showed little impact after the verdict in the case, which was widely regarded as the least consequential of the four criminal prosecutions Trump faces. Neither a criminal conviction nor a prison sentence will affect Trump’s eligibility to become president if he wins the Nov. 5 election.
Trump’s net worth is tied to his stake in TMTG. He owned 64.9% of the company as of April 26, which is worth $5.7 billion.
After the stock nearly tripled this year, TMTG’s valuation of about $9.2 billion is equivalent to around 2,200 times the loss-making company’s $4.1 million revenue in 2023, according to LSEG data.
“The valuation of that stock has always been a bit of a question mark. It certainly isn’t making any money and is trading almost at an unfathomable level,” Hogan said.
(Reporting by Medha Singh additoinal reporting by Pranav Kashyap and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)