Shares of Trump Media & Technology Group have plummeted in recent days, dropping by 10% on Monday alone. This decline adds to a rough week for the company, which has seen a third of its stock value wiped out. Former President Donald Trump’s stake in the company has shrunk to approximately $2.9 billion, down significantly from its peak of $5.2 billion. Trump, who owns 78.8 million shares in Trump Media, saw the stock go public in 2021 after facing delays due to regulatory and legal scrutiny.
Experts have cautioned that Wall Street may have overvalued Trump Media based on traditional metrics such as revenue and users. Last week, the company disclosed a loss of $58 million in 2021 with only $4.1 million in revenue. In comparison, Twitter (now X) generated $665 million in revenue in 2013 before its IPO, marking a stark contrast in financial performance. Despite this, Trump Media was valued at up to $11 billion after its first day of trading, nearly twice the valuation of Reddit after its IPO, even though Reddit generated significantly more revenue.
The recent losses in Trump Media’s stock price have not erased the positive momentum it has experienced this year. Shares of the company and the blank check company it merged with have more than doubled in value in 2022. Despite this, concerns remain about the company’s financial performance and whether it can live up to the high valuation set by the market. While Trump’s ownership stake in the company has decreased, he still holds a significant amount of shares, making his fortunes tied to the company’s performance.
The company’s performance has been under scrutiny due to its lackluster financial results and the comparison to other tech companies like Twitter and Reddit. Trump Media’s revenue of $4.1 million pales in comparison to the $665 million generated by Twitter in 2013 before its IPO. This discrepancy in revenue raises questions about the valuation of Trump Media and whether it can sustain growth in the future. Investors are closely monitoring the company’s progress and financial results to determine if it can deliver on the high expectations set by the market.
The volatility in Trump Media’s stock price reflects the uncertainty surrounding the company’s future prospects. The sharp decline in the stock price highlights concerns about the company’s ability to meet expectations and deliver strong financial results. As Trump Media continues to navigate the challenges of the market and regulatory scrutiny, investors will be closely watching for signs of improvement and stability. The company’s performance in the coming months will be crucial in determining its long-term viability and ability to compete in the competitive tech industry. Despite its recent struggles, Trump Media’s fate remains uncertain as it seeks to establish itself as a player in the digital media landscape.
