Investors in Trump Media & Technology Group See Dramatic Losses

Shares of Trump Media & Technology Group are currently plummeting.

The owner of Truth Social saw their share price decrease by another 5% by mid-day Friday, marking the seventh day of losses out of the past eight.

During that time, the only increase was a small 0.8% gain on Tuesday.

Trump Media's current trading price is now below $31, a significant drop from the peak of almost $80 on March 26 when it first started trading on the Nasdaq as "DJT."

Anyone who purchased Trump Media at the closing high of $66.22 on March 27 has now lost more than half of their investment. This steep drop in value has significantly decreased former President Donald Trump's net worth.

Trump holds a significant portion of 78.8 million shares in the company, but it generates minimal revenue and is losing users.

At one point, the stock price of Trump Media reached a high, valuing the former president's stake at $5.2 billion. However, the value of those shares has now dropped to around $2.4 billion.

"According to Trump Media spokesperson Shannon Devine, Truth Social was able to establish a platform for free speech as a challenge to Big Tech, at a much lower cost compared to traditional tech companies. With no debt, over $200 million in reserves, and the backing of numerous retail investors who are passionate about our goals,"

"However, the significant financial losses highlight the caution advised by experts for retail investors considering involvement with this stock."

Trump Media revealed a loss of $58 million in 2023 with only $4.1 million in revenue. Surprisingly, the company is still valued in the billions, puzzling experts.

One popular method for evaluating stocks is by looking at their price-to-sales ratio. According to Renaissance Capital's Matthew Kennedy, even if Trump Media's stock price dropped to just above $1, it would still have a higher price-to-sales ratio compared to Meta, Pinterest, Snap, Reddit, or Rumble.

Former U.S. President Donald Trump attends a campaign event on April 02, 2024 in Grand Rapids, Michigan.

Former U.S. President Donald Trump attends a campaign event on April 02, 2024 in Grand Rapids, Michigan.

Spencer Platt/Getty Images

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‘This thing is going crazy.’ Why Trump Media stock is subject to extreme turbulence

Billionaire Barry Diller, who is the chairman of Expedia and owner of People Magazine under IAC, has publicly criticized Trump Media, calling it a "scam" and those supporting it as "dopes."

Shannon Devine, a spokesperson for Trump Media, responded to the criticism by stating that it's not surprising to see strong critics of Trump and those on the left react negatively now that Truth Social is a publicly traded company that continues to support political expression without censorship.

Even though Trump Media stock is tumbling lately, it does remain up more than 74% on the year when accounting for gains from the blank-check company it merged with.

Editor's P/S:

The plummeting share price of Trump Media & Technology Group, the owner of Truth Social, highlights the company's financial struggles and challenges. Despite being valued in the billions, Trump Media's minimal revenue and user loss have raised red flags among experts. The steep drop in stock value has significantly impacted Donald Trump's net worth, raising concerns about the viability of the company. The high price-to-sales ratio compared to other social media platforms further emphasizes the discrepancy between the company's valuation and its current performance.

Furthermore, the public criticism by industry experts has cast doubt on Trump Media's long-term prospects. Despite the company's claims of providing a platform for free speech, its inability to generate significant revenue and attract a sizable user base suggests fundamental flaws in its business model. The company's lack of debt and large reserves may provide some stability, but investors may remain hesitant until they see concrete signs of financial improvement.