DJT stock and Trump meme coin prices fall after inauguration day. ‘Broligarchy’ shares hold steady

Yesterday, Donald Trump was sworn in for his second, non-consecutive term. The 47th president of the United States has already made sweeping Day One changes, much to the delight of his supporters and to the horror of many others.

These changes include announcing America’s withdraw from the World Health Organization (WHO), delaying the TikTok ban, and exiting the Paris Climate Agreement.

But in the day since Trump’s inauguration, two other notable things have happened. The stock price of the president’s Trump Media & Technology Group Corp. (Nasdaq: DJT) has fallen and the price of his new meme coin, TRUMP, has plummeted. Here’s what you need to know.

DJT shares are falling, but why?

As of the time of this writing, shares of Trump Media, which owns the president’s Truth Social social media network, are down over 5% to below $38 in premarket trading. That’s a notable fall from yesterday’s close of $40.03—a day that already saw DJT shares close 2.37% lower.

The big question is why? Donald Trump just celebrated the biggest political victory of his life, and with Republican control of both the Senate and House and a conservative majority in the United States Supreme Court, it seems there is little to stop Trump from enacting his agenda.

However, it’s worth noting that Trump’s political successes won’t necessarily translate to a higher share price for DJT. Trump Media’s business revolves around Truth Social, which makes money through ads. The company reported a net loss of $19.2 million during its last quarterly earnings in November. Truth Social hasn’t announced any new financials—good or bad—and it’s not set to do so until next month.

So why is the stock falling? That’s hard to pinpoint. One possible explanation is profit-taking. In the 10 days before Trump’s inauguration yesterday, DJT shares shot up from around $34 per share to just above $40 by last Friday.

DJT shares are widely seen to be a “belief stock”—a stock whose gains and losses are incumbent on the popularity of the person behind the company instead of being based on any solid financial fundamentals of the company.

It’s possible now that Inauguration Day has passed, speculators are selling DJT shares to lock in some profit they’ve gained over the past ten days.

But that’s just one possibility.

Is the TRUMP meme coin impacting DJT’s share price?

If the belief stock theory of DJT holds, DJT is a vehicle used by some to express their love for or faith in Donald Trump. Before last week, DJT shares were essentially the only financial vehicle of this kind available. But just before the inauguration, Trump announced the TRUMP meme coin. The coin ($TRUMP) vaulted to highs of $75 after it was announced.

Now that there is an official cryptocurrency that can act as a vehicle to express a person’s support for Donald Trump, could it be siphoning off some of the support that DJT stock would normally see from playing that role?

It’s a question that is impossible to answer since you can never really know what drives individual investors to buy or sell any specific stock or cryptocurrency.

However, one strike against this theory is that the $TRUMP meme coin has also plummeted since Inauguration Day. According to CoinMarketCap data, $TRUMP is down over 30% in the past day to $37.62 at the time of this writing. That’s a massive drop from the coin’s all-time high of around $75 on January 19.

So then, why is $TRUMP falling? Again, it’s impossible to state a specific reason with any certainty. However, cryptocurrencies—meme coins in particular—are notoriously volatile, and crypto speculators may be trying to lock in any gains they’ve made in the run-up to the inauguration.

‘Broligarchy’ stocks holding steady

While Trump-linked assets are falling today, shares in many companies founded by what has become known as the brologarchy—tech billionaires like Elon Musk, Mark Zuckerberg, and Jeff Bezos, who have thrown their support behind Trump—are holding steady in the premarket hours before first trading day since the inauguration.

As of the time of this writing, Meta Platforms (Nasdaq: META) shares are little changed, up just a few tenths of a percent. Tesla (Nasdaq: TSLA) shares are up about 2%. And Amazon.com (Nasdaq: AMZN) shares are up a little more than 1%.

Meta founder Mark Zuckerberg, Tesla founder Elon Musk, and Amazon founder Jeff Bezos all were granted prime seating at Trump’s inauguration yesterday.