Trump was found guilty by a New York jury on Thursday in the sealing fee criminal case, and all 34 felonies charged were found guilty, causing high market attention.
After the US stock market closed on Thursday, the stock price of Trump Media Group (DJT), which holds 65% of Trump's shares, fell more than 15% at one point, and the current decline has narrowed to 6.06%.
The company went public in March using the shell of SPAC's Digital World Acquisition, and its stock price fluctuated greatly, first soaring and then plummeting. It is considered a typical case of meme stocks in the US stock market at present. Since its listing at the end of March, the stock has cumulatively fallen by about 10%.
At present, DJT's market value is approximately $9 billion, and the only product that supports its market value is the personal influence of presidential candidate Trump. But this "product" clearly faces "significant quality risks", and if Trump's appeal fails, he will face up to four years in prison.
Let the bullet fly for a while longer
The political turmoil caused by the sealing fee case has not yet caused significant asset volatility in the US market, but most people expect it to still affect the confrontation in this year's US election. The guilty Republican candidate Trump and the current presidential and Democratic candidate Biden have had a stalemate in their approval ratings.
Analysts generally believe that it is currently unclear how this ruling will affect Trump's campaign, and further observation of sentencing risks and market reactions is needed.
Keith Lerner, Co Chief Investment Officer of Truist Consulting Services in Atlanta, stated that while there is a constant stream of news during the election cycle, political news may not have a significant impact on the market during this period, and market reactions are relatively lackluster.
Jamie Cox, Executive Partner of Harris Financial, pointed out that although Trump's guilt will not affect the market, it may have an impact on DJT as an individual stock. He said that the market actually had expectations for Trump's conviction, and that he was not convicted was the big news. The market no longer believes in the conviction of the sealing fee case.
Returning to DJT, investors and analysts tend to believe that political uncertainty will increase the volatility of the company's stock price, ultimately driving its performance back to fundamentals.
According to DJT's latest financial report, its net loss in the first quarter was as high as $327.6 million, but its revenue was less than $1 million. As of December 31 last year, the net loss for the year reached nearly $60 million, and the company warned that it expects the loss to continue.
In addition to DJT stocks, there is also bad news about another asset related to Trump. After the guilty verdict, the price of Trump memes fell by 35%, while Biden memes soared by 20%.