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The value of shares in Trump Media, the parent company of Truth Social, has been cut in half since being available on the public trading market.
According to reports, shares of Trump Media & Technology Group, the company that operates the Truth Social social media network, closed at $32.59 Friday (April 12). Despite a late rally, the price reflects a 50% drop from its original peak closing price of $66.22 when it was first made available for public trading on the NASDAQ stock market on March 27. The drop has shaved billions off of the value of the stock, of which the lion’s share (at 57.6% of all shares) is owned by former president Donald Trump. Trump owns 78.75 shares of TMTG stock. Its value was previously listed as $5.2 billion, closing with a value of $2.6 billion.
The slide comes as observers have cast aspersions about the validity of the TMTG stock. IAC and Expedia chairman, Barry Diller, went on record in an interview with CNBC calling the public trading of the stock “ridiculous,” comparing it to the “meme stock” that has been associated with GameStop and AMC Entertainment since 2021, which was valued at $700 and $500 at the time. “The company has no revenue. It’s a scam, just like everything he’s ever been involved in is some sort of con,” Diller said.
When asked about his opinion of those buying the stock, he replied: “I think they’re dopes.” Representatives for TMTG fired back at Diller. “It is unsurprising to see die-hard Trump haters and leftwing flacks blow a gasket now that Truth Social has become a public company that, still today, refuses to suppress political expression that contradicts the narratives they want to enforce,” they said.
Donald Trump is currently in New York City as the jury selection process has begun for his “hush money” trial in a Manhattan courtroom Monday (April 15), the first-ever criminal trial of a former president. The company filed a motion to issue 21.4 million additional public stock shares earlier in the day. The impact of the news plunged the value of shares down another 15% at the beginning of trading. The additional shares cannot be released until a registration takes effect with the Securities and Exchange Commission, according to the preliminary prospectus filing.
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Donald Trump’s social media platform Truth Social took a huge dive on the stock market as more details on its earnings were revealed.
On Monday (April 1), investors got their first look at the financial data of the parent company behind Truth Social, the social media platform of former President Donald Trump. And what they saw led to the values of shares in the company plummeting sharply, leading to a billion dollars shaved off of the value of Trump’s personal stake in the Trump Media and Technology Group.
According to reports, the regulatory finding released by the company to go public on the NASDAQ stock market led to Trump Media stock sinking 25% in value to $46 a share as opposed to $79 a share the week before. The data also revealed that the company made $4.1 million last year in revenue, closing out with a fourth quarter earning of $750,000 but a net loss of $58 million overall. As for Trump’s stake in the company, which is estimated to be 78.5 million shares or 57% of all shares, the value of those shares dropped to $3.64 billion on Tuesday (April 2), from $6.25 billion previously. Trump Media went public after a reverse merger with Digital World Acquisition Corp.
A further report from Forbes states that Truth Social is being viewed as a “meme stock” similar to the rise seen with AMC and GameStop stock in 2021, which surged thanks to the rush of consumers buying up the stock when it was so low. Trump supporters swooped in to buy shares as Truth Social went public, but it couldn’t prevent the value drop. “Trump Media’s 1,470 price-to-sales ratio, which compares a company’s total valuation to its last 12-month sales, is exponentially higher than social media peers Reddit and Snap’s respective 9 and 4 price-to-sales ratios,” the publication wrote.
The news comes as Trump managed to successfully post a $175 million bond late Monday evening in his appeal of a massive civil fraud judgment against him in New York to prevent the seizure of his assets. The bond, lowered from $464 million after Trump’s attorneys stated that bond companies refused to back him for the amount, was secured through the Knight Specialty Insurance Company, a company owned by the Hankey Group, whose owner is an avowed Trump supporter. As for Trump’s potential to sell his shares in Truth Social, he is barred from doing so for six months.
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