Trump’s Media Company to Invest $400 Million in Own Shares Amid Sharp Stock Decline: What This Means for Investors

NEW YORK (AP) — Donald Trump’s media company plans to buy back up to $400 million of its stock, which has dropped 46% in value this year.

Trump Media and Technology Group, the operator of the Truth Social platform, announced this move on Monday to enhance its financial situation. Once the shares are purchased, they will be retired, meaning they won’t be available again.

When a company buys back shares, it can boost stock prices by reducing the total number of shares out there. Trump owns around 114 million shares, making him the largest stakeholder.

On Monday, shares of Trump Media saw a slight increase of just over 2%. However, after going public in late March, the stock seemed to hit its peak and has been steadily declining since.

This year, the company reported a loss of $400.9 million and a 12% drop in annual revenue, bringing it down to $3.6 million.

After the 2020 presidential election, Trump transferred all his shares to the Donald J. Trump Revocable Trust. Those shares were valued at about $4 billion, making up more than half of the company’s stock.

The company plans to fund the buyback separately from its Bitcoin strategy. Institutional investors are set to buy $2.5 billion in the company’s stock, with the aim to build a Bitcoin reserve. Trump Media isn’t alone in this; other firms, like MicroStrategy, are also investing heavily in cryptocurrency.

Expert opinions suggest that buybacks can temporarily raise stock prices but don’t necessarily indicate a healthy business model. Financial analysts often debate their long-term effectiveness. A recent survey from the CFA Institute indicates that nearly 60% of investors believe stock buybacks can harm future growth opportunities.

In the ever-evolving tech landscape, businesses are increasingly looking to cryptocurrencies for stability and growth. This trend highlights a shift where traditional media firms are venturing into digital assets, aiming to enhance their financial resilience.

You can read more about stock buybacks and their implications at [Investopedia](https://www.investopedia.com/terms/s/stockbuyback.asp).

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Trump Media Technology Group, Donald Trump, Mergers and acquisitions, Stocks and bonds, Corporate management, New York City, New York City Wire, New York, NY State Wire, Business, MicroStrategy, Inc., United States government