Trump’s Bad Debate Cost Him Nearly $500 Million

Ever since Trump Media & Technology Group, the meme stock company that owns Donald Trump’s social network, began trading on the NASDAQ earlier this year, I’ve been skeptical of the conventional wisdom on Wall Street that a company’s stock price is a predictor of its chances of winning the presidency. This isn’t based on some efficient-market theory from the University of Chicago, or on the belief that investors and traders are always the most sophisticated readers of the market. Stocks simply aren’t polls. They can move based on changing vibes, yes, but there are supply and demand issues (which are a major driver of wild stock price swings), the numerous fraud allegations that have dogged the company, and other intangible, broader factors like Federal Reserve Chairman Jerome Powell’s feelings on interest rates.

But by Wednesday, it was abundantly clear that Trump’s widely criticized debate performance had dragged down his company’s stock. Trump Media, trading under the symbol DJT, had fallen 19 percent from yesterday’s peak to a yearly low of $15.35. (The stock has fallen about 74 percent this year since its peak in March, shortly after going public.) To put that in perspective, it’s less valuable now than it was in January, before the publicly traded shell company that ultimately bought it — Digital World Acquisition Company — won approval to merge with Trump Media in a SPAC go-publication. It also wiped $467 million off Trump’s net worth about a week before he was set to cash in all of his shares.

Now, it’s true, all the technical considerations are still there. The Dow fell about 700 points Wednesday morning after new inflation data suggested the Fed was unlikely to make a big interest-rate cut next week. But Trump’s debate performance was also a demonstration of the value, or lack thereof, of Truth Social, his Twitter follower.

Trump Media’s only real asset these days is a social media network that’s basically a less reputable version of Elon Musk’s X. It’s the kind of place where conspiracy theories about stolen elections, cops who Actually whether the January 6 uprising and Haitian migrants stealing and eating dogs were not disputed. The moments where Trump seemed to lose control of himself during the debate were when he seemed to mimic users of his own social network. You can see that the drop in DJT stock is not just a reaction to Trump in prime time, but a broader understanding that these kinds of posts on Truth Social have little value outside his small network.

That has a direct impact on Trump’s net worth. In March, Bloomberg valued his net worth at $6.5 billion, with the bulk of his wealth, about $3.9 billion, tied up in his stake in DJT. With shares trading below $16 — down from a high of $61.96 in March — that stake has fallen to less than $1.8 billion. The stock is expected to fall even further in the next few days as investors try to get ahead of the expiration of a lockup agreement that prevents insiders like Trump from selling their shares before Sept. 19.

Of course, for the die-hard meme traders who have made DJT so volatile, this is all just an opportunity. To some, the stock’s decline is evidence of the nefarious activities of short sellers betting against the stock. “Crime, crime, and more crime!” Greg Bowden, an early Trump Media investor I interviewed earlier, told me. But to others, it’s just a buying opportunity. “I think it’s going to turn green soon. I just added $3,000 to my portfolio. I’ve been waiting a while,” wrote one user who goes by the pseudonym Dr. Ghosh on a stock forum. “Thanks, fake media and short sellers!”