The United States has been rattled this week by a landmark verdict that is sending shockwaves across both the political and financial landscape as former President Donald Trump was found guilty on all 34 felony counts related to his hush money trial.
The decision marked the first time in the country’s history that a former president has been convicted of a crime and immediately impacted some of Trump’s business interests including the stock of Trump Media & Technology Group (DJT), which is plummeting by nearly 6% during this morning early stock trading action.
A Historic Moment for Trump and American Politics
Following 9 and a half hours of intense deliberation, a jury in New York found Trump guilty on all charges including falsifying business records to conceal the payment of “hush money” to porn actress Stormy Daniels after an alleged sexual encounter they had in 2006.
Also read: Donald Trump’s Truth Social Is About to Become a $6 Billion Meme Stock – Is It the New GME?
According to the case’s records and testimonies, the former president paid his lawyer Michael Cohen a total of $130,000 back in 2016 to negotiate with Daniels so she kept the scandal hidden from the public and obscured all records involving these payments.
Prosecutor Matthew Colangelo did not mince words in his opening statement: “It was election fraud. Pure and simple.” The prosecution argued that Trump’s actions were part of a “planned, coordinated long-running conspiracy to influence the 2016 election through illegal expenditures” that sought to silence anyone who had negative stories about his behavior. It seems that the jury of twelve of Trump’s peers agreed with the prosecution.
Trump’s defense, however, contended that the Cohen payments were for legitimate legal services. His attorney, Todd Blanche, asserted in his closing statement: “President Trump is innocent. He did not commit any crimes.”
Trump himself blasted the jury’s conviction and called the whole proceeding “a disgrace,” saying that he is “very innocent.”
“This was a rigged trial by a conflicted judge who was corrupt as a rigged trial, a disgrace. They wouldn’t give us a venue change. We were at 5 percent or 6 percent in this district, in this area. This was a rigged, disgraceful trial.”, he told reporters outside the court right after the verdict was read.
Is Trump Media (DJT) Stock Doomed Now?
Trump’s guilty verdict had an immediate impact on the valuation of Trump Media as the stock plummeted by nearly 5% to $49.4 per share during the first few minutes of the trading session.
The company, which owns the far-right social media platform Truth Social, experienced a much sharper sell-off during the extended session yesterday after the conviction became public. Late in the afternoon, it was shedding more than 15% of its value.
However, in a surprising turn of events, the stock recovered some of its early losses by Friday morning, even turning positive with a gain of about 5% before the market opened. This resilience suggests that despite the legal setback, investors still have some degree of confidence in the company’s potential—or perhaps in Trump’s ability to weather the storm. Perhaps the 34 felony convictions will actually be positive for the meme stock.
This volatility is not new for Trump Media’s stock, which trades under the ticker “DJT.” Since its debut in late March, following a merger with Digital World Acquisition Corp (DWAC), the stock has been extraordinarily volatile.
At some point, its value tripled as it was swept by the meme stock craze. Meanwhile, it frequently posted double-digit percentage moves either higher or lower on a single day. At its peak on March 26, it reached nearly $80 per share during that day’s session.
Trump Media’s Financial Health is Questionable
While the stock’s performance has been impressive in the face of its founder’s convictions, the company’s financial health tells a different story. Earlier this month, Trump Media reported a staggering loss of over $300 million in its first quarter as a publicly traded company.
For the three months ending March 31, DJT posted a net loss of $327.6 million, with $311 million attributed to non-cash expenses related to its merger with DWAC.
These financial challenges are augmented by recent auditing issues. On May 3, Trump Media dismissed BF Borgers as its independent public accounting firm. This was an auditor that federal regulators recently charged with “massive fraud.”
This dismissal has delayed the filing of its quarterly earnings report and marks at least the third change in auditors since July 2023.
Cryptocurrencies Tied to Trump Defy Gravity and Post Gains Following Trump’s Conviction
Meanwhile, Trump’s presence in the cryptocurrency space via parody meme coins was also affected by the conviction – although thus far the impact has been positive.
According to data from CoinMarketCap, the value of the Doland Tremp (TREMP) token, a meme coin themed by a cartoon that resembles the former president, posted gains of 8% in the past 24 hours.
Also read: BODEN and TREMP Skyrocket After Trump Comments on Crypto, Meme Coins at NFT Dinner
Meanwhile, the most popular Trump-related token, MAGA (TRUMP), produced gains of 19.5% in the past day and it has delivered a positive return of 94.5% in the past 7 days alone.
Trump’s conviction has no direct financial impact on these tokens in the sense that none of them produce any cash flows or are directly tied to Trump. However, since their whole ethos is tied to the former president, their value may be impacted by any developments involving him – including the trial’s results.
What Will DJT Need to Survive?
Trump’s conviction comes at a critical time in his political career. As the expected Republican nominee for president for the November election, he was getting ready to be formally nominated by the Republican National Convention in July.
The sentencing, scheduled for July 11 – just four days before the convention – adds another layer of complexity to Trump’s ambitions. He faces penalties ranging from a fine to four years in prison on each count, although most experts believe that he won’t face jail time as it is his first conviction and he is an elderly man. It seems that Trump won’t face any meaningful consequences outside of the arena of public opinion.
Trump’s Nomination Seems Pivotal for the Future of DJT and Trump-Themed Meme Coins
As the dust settles on Trump’s historic conviction, the future of Trump Media and Trump-themed meme coins remains uncertain. The resilience that the stock displayed regardless of the negative impact that the conviction could have on the former president’s image suggests that investors are betting on Trump’s ability to turn his legal troubles into an opportunity among his hardline followers.
However, the company’s financial health and auditing issues raise serious questions about its long-term viability. With over $300 million in losses and minimal revenue, much of its faith depends on the strength of Trump’s personal brand.
As we move forward, all eyes will be on Trump’s sentencing on July 11 and the Republican National Convention just days later. These events could have significant implications not only for Trump’s political agenda and career but also for the financial health of Trump Media and the valuation of Trump-themed meme coins (not to mention the entire country).
If Trump loses the 2024 election, it seems likely that both DJT and any meme coins tied to him will collapse before too long.