Trump’s Bad Debate Cost Him Nearly $500 Million

Ever since Trump Media & Technology Group, the memestock company that owns Donald Trump’s social-media network, started trading on NASDAQ earlier this year, I have been skeptical of the common wisdom on Wall Street that the company’s stock price is a proxy for his odds of winning the presidential election. This isn’t because of some kind of University of Chicago–derived efficient-market theory and far less a belief that investors and traders are always the most sophisticated readers of a market. Stocks are simply not polls. They can move based on shifting vibes, yes, but there are supply-and-demand issues (which are a core driver of the wild swings in stock prices), the many fraud accusations that have trailed the company, and other bigger-picture intangibles, like Federal Reserve chairman Jerome Powell’s feelings about interest rates.

But on Wednesday, it was pretty clear that Trump’s widely panned debate performance dragged down the shares of his company. Trump Media, which trades under the ticker DJT, fell as much as 19 percent from last night’s highs to its lowest point all year of $15.35. (This year, shares are down about 74 percent from its high in March, shortly after going public.) To put that into perspective, it is now less valuable than it was in January, before the publicly traded shell company that ultimately bought it — Digital World Acquisition Company — was cleared to merge with Trump Media as part of the process of going public through a SPAC. It also erased $467 million of Trump’s net worth about a week before he can cash out all his shares.

Now, it is true that all the technical considerations still exist. The Dow Jones had fallen about 700 points on Wednesday morning after new inflation data implied the Fed was unlikely to do a large cut to interest rates next week. But Trump’s debate performance was also a demonstration of the worth, or lack thereof, of Truth Social, his Twitter copycat.

Trump Media’s only real asset right now is the social-media network, which is essentially a less reputable version of Elon Musk’s X. It is the kind of place where brain-wormed conspiracy theories about stolen elections, the cops who actually did the January 6 insurrection, and Haitian migrants stealing and eating dogs go unchallenged. The moments when Trump most clearly lost control of himself during the debate was when he seemed to be aping the users of his very own social network. You can see how the plunge in DJT shares is not just a reaction against Trump spinning out in prime time but a broader realization that the kinds of posts on Truth Social have little value outside its tiny network.

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

Of course, to the die-hard meme-stock traders who have made DJT so volatile, this is all just an opportunity. To some, the fall in the share price is proof of the nefarious actions by short sellers betting against the stock. “Crime, Crime, and more Crime!” Greg Bowden, an early Trump Media investor I interviewed previously, told me. But to others, it’s just a buying opportunity. “I think it will turn green soon. I just added $3K to my portfolio. I was waiting for a while,” one user, who goes by Dr. Ghosh, wrote in a forum dedicated to the company’s shares. “Thanks, fake media and short sellers!”