Former President Donald Trump saw his net worth drop by about $300 million on Wednesday as shares of his social media company, Trump Media and Technology Group, continued to decline. The company’s market capitalization fell below $5 billion, down from a peak of $10 billion just two weeks ago. Trump’s 58% stake in the company, totaling 78.75 million shares, fell in value from $2.95 billion to $2.65 billion as share prices dropped by over 9% to $33.91.
Since its first day of trading under the DJT ticker in a SPAC merger, Trump Media’s share price has fallen by 57% from its peak of $79.38 on March 26. This decline has contributed to a decrease in Trump’s net worth from over $7 billion in March to $4.5 billion as of Wednesday, according to Forbes’ estimates. Despite the initial growth in his net worth of $4.1 billion when Trump Media went public, analysts believe the company may be overvalued due to its modest revenue and consistent losses. Forbes estimates the company to be worth between $40 million and $90 million using metrics employed to evaluate other social media companies.
Trump Media went public last month following a merger with Digital World Acquisition Corp, with both companies announcing their intent to merge in October 2021, shortly after Trump left office. The decision to go public was influenced by Digital World’s status as a special-purpose acquisition company, allowing the company to enter the market without the regulatory hurdles typical of traditional public offerings. Trump has remained supportive of Trump Media, claiming on Truth Social that the company is “very solid” and “growing fast.” Analysts note that Trump Media is the most expensive U.S. stock to short, with investors betting on a decrease in share price having to pay approximately $1 per day to brokers on the other side of the trade.
Trump’s financial losses are a significant blow to his net worth, which has fluctuated dramatically in recent months due to the success or failure of Trump Media. As the company’s share price continues to decline, Trump’s stake in the company decreases in value, impacting his overall financial standing. The overvaluation of Trump Media highlights potential risks for investors and raises questions about the company’s long-term viability in the competitive social media landscape. Trump’s public defense of the company contrasts with the skepticism of analysts regarding its valuation, leaving uncertainty surrounding the future prospects of Trump Media and its impact on Trump’s wealth.
