Shares of Truth Social owner Trump Media & Technology Group have plummeted by 9% on Friday, marking the lowest level since the company went public last week. This selloff has resulted in nearly $2 billion being wiped off former President Donald Trump’s stake in the company this week. The share price of Trump Media surged to $79.38 on the day trading began on Nasdaq under the ticker symbol “DJT,” but has since dropped by as much as 47% to $41.90 on Friday. Overall, Trump Media’s shares have lost about a quarter of their value this week, with Trump’s personal stake now valued at around $3.3 billion, down from $4.9 billion the previous week.
Recent financial disclosures by Trump Media revealed that the company lost $58 million last year despite having meager revenue of just $4.1 million. This has raised concerns among experts that the company may be significantly overvalued by Wall Street. Billionaire chairman of Expedia and People Magazine owner IAC, Barry Diller, spoke out against Trump Media on CNBC, calling it a “scam” and referring to those buying the stock as “dopes.” Diller pointed out that the company has no revenue, questioning its high valuation.
In response to criticism from individuals like Diller, a Trump Media spokesperson defended the company, stating that it is not surprising to see detractors react negatively to Truth Social becoming a public company. The spokesperson accused individuals of being “die-hard Trump haters and leftwing flacks” who are upset that Truth Social refuses to censor political expression that goes against their preferred narratives. This statement suggests that Trump Media remains committed to providing a platform for diverse political viewpoints.
The sharp decline in Trump Media’s share price reflects growing skepticism regarding the company’s financial viability and potential for success in a competitive market. The significant loss in market value within a short period highlights the uncertainties surrounding Truth Social and its ability to generate sustainable revenue. Despite initial enthusiasm surrounding Trump Media’s IPO, the reality of its financial performance has caused some investors to reconsider their positions.
The controversy surrounding Trump Media’s financials and valuation raises broader concerns about the sustainability of social media platforms tied to prominent political figures. The company’s dependence on Donald Trump’s reputation and influence may limit its long-term profitability and growth potential. Criticisms from industry leaders and experts further underscore the challenges facing Truth Social in establishing itself as a successful player in the social media landscape.
Ultimately, Trump Media’s stock performance and financial struggles signal the complex dynamics at play when aligning a business with a controversial political figure. The fluctuations in share price, along with ongoing criticism, highlight the volatility and skepticism surrounding Truth Social’s future prospects. As the company navigates these challenges, it will be essential to address concerns about its financial health and revenue generation to regain investor confidence and establish a sustainable path forward in the competitive social media industry.
