The steep plunge of the social media company has wiped out a big chunk of former president Donald Trump’s net worth.
Last week, Trump Media & Technology Group (DJT) shares fell to the lowest since the deal that took the owner of Truth Social public earlier this spring.
Trump Media has lost about 74% since it hit its high on March 27 at $66.22.
Resulting from that, investors like Trump lost many millions in the sell-off.
Related Posts
That blockbuster stake of 114.75 million shares, as of May 9, was worth $6.2 billion. With his net worth now down to about $2 billion, Trump is no longer part of the Bloomberg Billionaires Index, which tracks the 500 richest people on the planet.
The wipeout reinforces concerns from experts who have repeatedly said Trump Media’s multibillion-dollar price tag defies reason. Truth Social is still a very small player in the social media space, and the firm is losing money and generating little revenue.
“If it weren’t for Trump, this would be trading at $1,” Matthew Tuttle, chief executive of Tuttle Capital Management, told CNN over the phone.
In April, billionaire Barry Diller called investors in Trump Media “dopes” in an interview with CNBC. According to Reid Hoffman, a co-founder of LinkedIn, the company values Trump Media “absurdly out of the realm of normal,” he said in June to CNN. Like Diller, Hoffman is a huge Democratic fundraiser.
Moved by Trump Media’s declining share price, analysts have speculated that the probable cause of its decline is other than the firm’s poor fundamentals.
As Tuttle said, one of the big motivators is that in some surveys, Trump is even ranked higher than Vice President Kamala Harris.
Since President Joe Biden withdrew and Trump threw his support behind Harris on July 21, Trump Media has lost more than half of its market value. As Tuttle said, “This stock is totally a Trump-gets-elected play.” “If Trump wins, this business may succeed. But I don’t know how this will continue if he loses.
CNN did reach out to Trump Media for comment, but they did not respond. Of course, Trump Media still has more than $300 million in cash and equivalents, which gives it the financial heft it needs to finance operations and make acquisitions.
Although the group generated only $837,000 in sales last quarter, Trump Media is building a conservative-oriented streaming company. In August, Trump Media announced Truth+, a TV-streaming service for iOS, Android, and web editions of Truth Social.
Another overcast shadowing Trump Media is the looming expiration of the lock-up period, which has prevented Trump — and other insiders — from selling shares.
Filings indicate that constraints could be removed as early as September 20. If so, insiders would then be in a position to sell more freely.
Analysts said this stock sale would be very hard to do for its largest stakeholder, Trump, without taking the price down.
The stock market fortunes of Trump Media could, in fact, turn around now, considering the highly publicized conversation between the former president and Harris this Tuesday.
In any event, Tuttle said that regular investors, including Trump supporters, should be cautious and pay attention to the fundamentals as they manage the investment.
He said, “I really believe that politics and profit must be separate.” It is very stupid if you are holding on to this because you love Donald Trump. You invest to make money.
