Shares of Trump Media & Technology Group have been plummeting, with the owner of Truth Social seeing its share price drop by 5% as of mid-day Friday. This marks a seventh losing day out of the past eight, with the only gain being a small 0.8% increase on Tuesday. Trump Media is now trading below $31, a significant drop from the intraday spike to nearly $80 on March 26 when it went public on the Nasdaq. Investors who bought at the closing high of $66.22 on March 27 have lost more than half of their money.
Former President Donald Trump’s net worth has taken a hit as a result of the steep decline in Trump Media’s stock price. Trump owns a dominant stake of the company, with 78.8 million shares that were valued at $5.2 billion at the closing high. However, the value of these shares has since dropped to around $2.4 billion. Despite the losses, Trump Media spokesperson Shannon Devine highlighted the company’s financial position, emphasizing its lack of debt, significant cash reserves, and support from retail investors who believe in its mission of providing a free-speech platform against Big Tech.
Experts have warned retail investors about the risks associated with investing in Trump Media, given the company’s substantial losses and minimal revenue. Trump Media reported a loss of $58 million in 2023 on just $4.1 million in revenue, raising questions about the company’s high valuation in the billions of dollars. The price-to-sales ratio of Trump Media remains significantly elevated compared to other tech companies, even if its share price were to crash to just over $1. Billionaire Barry Diller has criticized Trump Media, calling it a “scam” and warning investors against buying it.
Despite the recent decline in Trump Media’s stock price, which has led to criticism from some quarters, the company is still up more than 74% for the year when factoring in gains from the blank-check company it merged with. Shannon Devine dismissed criticisms of Trump Media as being driven by political biases, emphasizing the platform’s commitment to upholding free expression. However, skepticism remains high among industry experts and investors, with concerns about the company’s financial performance and valuation. Trump Media’s ongoing struggles in the stock market reflect broader uncertainties around the future prospects of the social media platform.
