Trump Media Stock Falls After Guilty Verdict

Shares of Trump Media, the parent company of Truth Social, plunged after former President Donald Trump, its largest investor and primary user, was convicted on 34 felony counts of falsifying business records to cover up a sex scandal. The stock dropped about 5 percent in premarket trading on Friday, following a 14 percent dip immediately after the verdict was announced Thursday evening.

Trump Media’s stock is known for its volatility, especially in after-hours trading when low volumes can lead to significant price swings. Despite the recent decline, the company remains highly valued at over $8.5 billion. Mr. Trump, who owns approximately two-thirds of the shares, cannot sell or borrow against his stake until September. This stake is worth around $5.5 billion and has become his primary source of wealth since the company went public in March.

Financially, Trump Media has faced challenges, reporting an operating loss of $12.1 million and $770,000 in revenue in the first quarter of this year, a 30 percent drop from the same period last year. The revenue mainly comes from advertising on Truth Social.

On Truth Social, Mr. Trump’s supporters rallied to his defense, with trending topics including “Trump2024,” “MAGA,” and “IStandwithTrump.” Some users posted images of an upside-down American flag, symbolizing distress and echoing controversies linked to conservative figures like Supreme Court Justice Samuel A. Alito Jr.

Following the verdict, Mr. Trump’s presidential campaign capitalized on the situation, launching fundraising ads on Truth Social that portrayed him as a “political prisoner.” Regulatory filings for Trump Media have long warned that legal troubles for Mr. Trump could negatively impact the company and its platform.