In a recent development, the stock of Donald Trump’s social media venture, known as DJT, has taken a nosedive just days after it went public.
Trump Media & Technology Group, the parent company, reported a significant loss of nearly $60 million in the past year, with only about $4 million in revenue. This drop in shares has led to a staggering $1 billion decrease in Trump’s net worth.
Experts had forewarned of this downward trend, citing concerns over Truth Social’s diminishing user base and financial struggles. Despite a surge in shares last week, which resulted in an $11 billion valuation for the company, the recent plunge has raised doubts about the sustainability of Trump’s social media endeavor.
Truth Social, which was launched in February 2022 following Trump’s ban from major platforms like Twitter and Facebook, has struggled to attract users, boasting only about five million active monthly users, significantly fewer than its competitors.
Trump, who holds nearly 60% ownership in the company, stands to gain substantially when he cashes out his shares, potentially earning a billion-dollar windfall. However, recent events have cast uncertainty on the future prospects of Trump Media & Technology Group.
The decline in Trump Media’s stock, which tumbled 21% in Monday trading, equating to about $1 billion in losses for Trump, underscores the challenges faced by the company. Despite Trump’s significant stake in the venture, the recent financial disclosures paint a bleak picture, with the company reporting a net loss of $58.2 million in 2023, coupled with minimal revenue.
Furthermore, Trump Media’s market capitalization appears disproportionately high compared to other public companies, with a price-to-sales ratio of 1,470, raising concerns among experts who liken the company to a meme stock.
As shares of Trump Media continue to exhibit volatility since the company’s public debut, Trump’s net worth remains susceptible to fluctuations in the market. With uncertainties looming over Truth Social’s viability and financial performance, the future of Trump’s social media empire hangs in the balance.