Shares in Trump’s Truth Social fall following presidential debate
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(NEW YORK) — Shares in former President Donald Trump’s social media company fell more than 12% Wednesday morning on the heels of Tuesday’s presidential debate, which a CNN poll indicated was won by Vice President Kamala Harris.
Shares of Trump Media & Technology Group, the parent company of Truth Social, were trading Wednesday at the lowest level since the company first went public — a drop of more than 70% since a closing high of $66.22 on March 27.
As of noon, the company’s shares were selling for $16.29.
For some investors, Trump Media serves as a bellwether for the former president’s odds in the upcoming presidential election. When Trump was convicted on 34 felony counts in New York in May, the company’s stock price tumbled — but the stock surged in the days following the July presidential debate and the assassination attempt on the former president.
Analysts have said that the company’s stock performance is removed from the financial outlook of the company, which reported losing more than $16 million over a three-month period ending in June during which it only brought in $836,000 in revenue.
The stock price has been buoyed by a number of passionate individual investors who bought shares in the company to support Trump or because they believe in the company’s mission.
Next week, Trump faces a pivotal choice about his investment in the company. The lockup provision that barred him from selling his shares for the first six months since the company went public expires next week, meaning that Trump could begin selling his shares in the company as early as Sept. 19.
According to filings with the Securities and Exchange Commission, Trump owns approximately 115 million shares of the company, which are worth nearly $2 billion based on Wednesday’s stock price.
On paper, Trump has lost more than $4 billion in his stake over the last six months as the company’s stock price has declined.
A representative for Trump Media & Technology Group did not immediately respond to a request for comment from ABC News.
(NEW YORK) — Keurig, the company behind the popular home brewing and single-serving coffee maker systems, will pay the SEC a $1.5 million civil penalty after it failed to disclose concerns from two major recycling companies about the K-Cup pods in its annual reports.
The Securities and Exchange Commission announced Tuesday that Keurig Dr Pepper Inc. will settle with the agency for the hefty fine after it was “charged with making inaccurate statements regarding the recyclability of its K-Cup single use beverage pods.”
“Public companies must ensure that the reports they file with the SEC are complete and accurate,” John T. Dugan, Associate Director for the regional Boston office of the SEC said in a press release. “When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions.”
A spokesperson at Keurig Dr Pepper told ABC News that the company was “pleased to have reached an agreement that fully resolves this matter.”
“Our K-Cup pods are made from recyclable polypropylene plastic (also known as #5 plastic), which is widely accepted in curbside recycling systems across North America. We continue to encourage consumers to check with their local recycling program to verify acceptance of pods, as they are not recycled in many communities. We remain committed to a better, more standardized recycling system for all packaging materials through KDP actions, collaboration and smart policy solutions,” the statement continued.
In consecutive annual reports for the company’s fiscal years 2019 and 2020, the SEC found that “Keurig stated that its testing with recycling facilities ‘validated that [K-Cup pods] can be effectively recycled.’ But Keurig did not disclose that two of the largest recycling companies in the United States had expressed significant concerns to Keurig regarding the commercial feasibility of curbside recycling of K-Cup pods at that time and indicated that they did not presently intend to accept them for recycling.”
According to the government agency’s review of the 2019 report, “sales of K-Cup pods comprised a significant percentage of net sales of Keurig’s coffee systems business segment, and research earlier conducted by a Keurig subsidiary indicated that environmental concerns were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system.”
The SEC order found that “Keurig violated Section 13(a) of the Securities Exchange Act of 1934 and Rule 13a-1 thereunder.
Keurig agreed to a cease-and-desist order, according to the SEC, without admitting or denying the findings in the order.
The SEC investigation was conducted by Michael Franck, Cassandra H. Arriaza, Susan Cooke, and Michele T. Perillo of the Boston Regional Office.
(NEW YORK) — Americans’ credit card debt has hit a record high, the Federal Reserve of New York said in a report released this week.
Credit card debt climbed $24 billion over a three-month stretch ending in September, soaring to a level 8% higher than where it stood a year ago, the report said.
Debt holders may seek solace in a string of recent interest rate cuts at the Federal Reserve, which typically reduce borrowing rates for credit cards. But credit card interest rates have proven stubborn, leaving borrowers saddled with near record-high average payments even after the rate cuts.
The average credit card interest rate stands at 20.35%, just slightly below a record-high of 20.79% attained in August before the Fed began cutting rates, Bankrate data showed.
Credit card interest rates remain high, in part, because the Fed’s benchmark rate still stands at a historically high level, experts told ABC News. The incremental cuts in recent months have only partially reversed the previous escalation of rates meant to fight the nation’s worst bout of inflation in decades.
That high baseline rate has collided with a rise in the average credit card margin, or the borrowing cost that companies place on top of the benchmark rate to weather default risk, cover overhead costs and recoup profits, experts added.
“Credit card rates are high, and they’re staying high,” Ted Rossman, a senior industry analyst at Bankrate, told ABC News.
To set credit card interest rates, the industry relies on what’s called a “prime rate,” which is the rate paid by the most creditworthy borrowers. That rate is calculated by adding three percentage points to the Fed’s benchmark interest rate. The prime rate, which acts as a baseline for credit card rates faced by all borrowers, currently stands at 7.75%.
The prime rate remains historically high because the Fed has, so far, taken just a few, incremental steps toward dialing back a yearslong series of rate hikes. In recent months, the Fed has cut interest rates by three-quarters of a percentage point, but such relief offers little savings for credit card borrowers, experts said.
Policymakers at the Fed forecast another quarter-point cut next month, and cuts next year totaling one percentage point, but that will still leave interest rates at an elevated level, according to projections released in September.
“I don’t think the Fed wants a rapid fall in rates,” John Sedunov, a finance professor at Villanova University’s School of Business, told ABC News. “It wants to gradually ease rates back.”
The persistence of high interest rates has coincided with a rise in the margin charged by credit companies over and above the prime rate, some experts said.
The average margin charged by credit card firms reached an all-time high of 14.3% last year, according to a U.S. Consumer Financial Protection Bureau analysis of Federal Reserve data. The margin increased sharply from a rate of 9.3% in 2013, the CFPB found.
The rise in credit card delinquency owes, in part, to a decline in personal savings, as Americans have spent down pandemic-era economic stimulus and turned to credit card loans, Sedunov said.
“Banks may view the amount of risk in credit card lending as higher than it was a few years ago, even though the Fed is lowering rates,” Sedunov said.
Growth in credit card margins also stems from old-fashioned profit-taking on the part of credit card companies, some experts said.
Credit card profitability has increased over the past five years, and has outpaced the profitability of other business drivers at the companies that offer them, according to the CFPB report.
“Banks, especially large banks, are trying to make as much profit as they can,” Fariz Huseynov, a professor of corporate finance at North Dakota State University, told ABC News.
Credit card rates may gradually decline in the coming months, since the Fed plans to make additional interest rate cuts, experts said. However, consumers should expect a gradual decrease that could be tempered by a bout of resurgent inflation or higher credit card delinquency rates, they added.
“If you’re in credit card debt, my advice is: Don’t make the hole even deeper, and shift to a debit card or cash if you can,” Rossman said, pointing to the likely persistence of high credit card rates.
“The point is you have to do something,” Rossman added.
(NEW YORK CITY) — The U.S. stock market climbed higher in early trading on Tuesday, as voters rushed to the polls and the nation awaited the results of a closely contested presidential election.
The S&P 500 ticked upward about 1%. The Dow Jones Industrial Average gained more than 300 points, jumping about 0.8%. The tech-heavy Nasdaq rose 1.3%.
Gains at large tech firms are helping to boost the market. Shares of Nvidia, an artificial intelligence chipmaker, climbed nearly 3% in early trading.
As of the early afternoon, tech giants Microsoft and Amazon each saw shares rise about 1.5%.
The market upswing follows a flurry of largely positive economic news over the past week. Government data released last week showed robust economic growth over a recent three-month period, alongside a continued cooldown of inflation.
U.S. hiring slowed in October, but fallout from hurricanes and labor strikes likely caused an undercount of the nation’s workers, U.S. Bureau of Labor Statistics data on Friday showed.
Ivan Feinseth, a market analyst at investment firm Tigress Financial, attributed the returns on Tuesday to eager anticipation among investors to move past the U.S. election.
“The nightmare of an endless election and a contentious battle has consumed a lot of the focus and attention. It’s almost over. Then it goes back to the fundamentals of the market,” Feinseth said.
The gains on Election Day extended a banner year for U.S. stocks. The S&P 500 and Nasdaq have each climbed more than 20% this year while the Dow Jones is up about 11%.
The performance has owed to enthusiasm about artificial intelligence as well as resilient economic growth and expectations that interest rates would ease, Feinseth said.
The Federal Reserve cut its benchmark interest rate a half of a percentage point in September, dialing back its yearslong fight against inflation and delivering relief for borrowers saddled with high costs.
The Fed is widely expected to cut interest rates by another quarter of a percentage point when it meets on Thursday, according to the CME FedWatch Tool, a measure of market sentiment.
An expectation of interest rate cuts among investors often sends stocks higher, since lower rates pave the way for cheaper corporate borrowing and the potential for higher profits.
“The market looks toward the future, and the Fed is now on the side of the bulls,” Feinseth said.
Over the full span of the next administration, the market will likely move higher whether the nation elects Vice President Kamala Harris or former President Donald Trump, experts previously told ABC News. However, each candidate’s policies could favor different types of stocks while posing unique risks, they added.
Trump has proposed a combination of low corporate tax rates and loose regulation that would likely bolster corporate profits and propel the stock market higher, experts said. Prices would likely increase under Harris, as they have under the economic stewardship of President Joe Biden, they added.
