Donald Trump has taken a $357m (£280m) hit as shares in his social media company dropped after the former president was found guilty of fraud.
Shares in Trump Media and Technology Group, the owner of Truth Social, fell by 6pc on Friday.
The drop knocks $550m off the company’s value. The Republican presidential candidate owns a 65pc stake in Truth Social that is believed to account for a majority of his net worth.
Trump’s stake is worth $5.6bn, although he is unable to sell any shares until September due to a lock-up agreement associated with the company’s initial public offering in March.
The drop in Truth Social’s shares is not as severe as might have been feared. They had fallen by as much as 14pc in closed-market trading immediately after Trump was found guilty of fraud on Thursday in his case involving “hush money” payments to a porn star.
Truth Social features similar functionality to X and was set up after Trump was banned from the social network, then named Twitter, shortly after the US Capitol riots of Jan 6 2021. It allows users to post short messages, or “retruth” them to share posts with others.
Elon Musk lifted the ban on Trump, once a prolific Twitter user, but the former president continues to exclusively use Truth Social, where he has 7m followers.
TMTG has said in regulatory filings that Trump being convicted could “negatively impact” the company. While Trump does not have a formal role at the company, a guilty verdict could mean Truth Social finding it harder to attract advertisers.
If it affects Trump’s chances of regaining the White House, it could also make the social network less influential. If Trump were to receive a prison sentence following his criminal conviction, he may be prevented from using the website.
Observers have said that the company’s valuation is largely disconnected from its financial performance, and partly driven by retail shareholders supporting Trump.
The company lost $327.6m (£256.6m) in the first three months of the year and had revenues of $770,500.
Despite Trump exclusively posting on Truth Social, Mr Musk is believed to have been regularly speaking to the former president, in part to encourage him to return to X, where his account still has 87m followers.
Mr Musk’s company is reportedly planning to host a video town hall event with Trump in the run-up to November’s US election.
TMTG is run by Devin Nunes, a former Republican congressman and close ally of Trump. The former president’s son, Donald Trump Jr, sits on its board.
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