Shares of Trump Media & Technology Group, the owner of Truth Social, have been plummeting in value, with the share price dropping 5% as of mid-day Friday. This decline marks the seventh losing day out of the past eight, with a small gain of 0.8% on Tuesday being the only exception. The stock, which went public on the Nasdaq on March 26 under the ticker symbol “DJT,” is now trading below $31, a significant drop from its intraday high of nearly $80. Investors who bought the stock at its peak on March 27 have lost more than half of their investment.
Former President Donald Trump, who owns a significant stake of 78.8 million shares in Trump Media, has seen a substantial decrease in his net worth as a result of the company’s declining stock price. His stake, which was valued at $5.2 billion at the closing high, has since plummeted to around $2.4 billion. Despite the losses, a spokesperson for Trump Media stated that the company has significant support from retail investors who believe in its mission of providing a platform for free speech that challenges Big Tech.
Trump Media’s financial performance has raised concerns among experts, with the company disclosing a loss of $58 million in 2023 on minimal revenue of just $4.1 million. Despite these poor financial results, Trump Media continues to be valued in the billions of dollars, leading to confusion among analysts. The company’s price-to-sales ratio remains much higher than that of other tech companies, even if its share price were to crash to just over $1. This discrepancy in valuation has led some, including billionaire Barry Diller, to label Trump Media as a “scam.”
Despite criticism from Diller and others, Trump Media remains up over 74% on the year when accounting for gains from the blank-check company it merged with. Shannon Devine, a spokesperson for Trump Media, has pushed back against criticism, attributing it to “die-hard Trump haters and leftwing flacks” who are unhappy with Truth Social’s success as a public company. Despite the recent declines in the stock price, the company is still operational and working to establish itself as a viable alternative to traditional social media platforms.
Overall, Trump Media & Technology Group’s stock has experienced a sharp decline in value since its public debut, with losses mounting for investors and impacting former President Trump’s net worth. The company’s financial performance, characterized by significant losses and minimal revenue, has raised concerns among experts about its valuation. Despite criticism and skepticism from some quarters, Trump Media remains up on the year and continues to attract support from retail investors who believe in its mission of providing a platform for free speech.
