Former President Donald Trump’s media business, Trump Media & Technology Group, has hit a rough patch just a week after going public. The company’s stock price took a sharp nosedive on Monday, resulting in a $3.8 billion loss in its market value. This plunge came as the company disclosed increasing losses in a regulatory filing, with its accountant warning about its ability to continue as a going concern.
The company’s primary asset, the Truth Social platform, saw its shares tumble 21% on Monday, closing at $48.66. This marked a 39% drop from its high of $79.38 shortly after its debut on the Nasdaq Composite Index. Despite a 6% rally on Tuesday, the stock has still lost $3.8 billion from its peak last week.
Former President Trump, who owns 57% of the company, saw a $2.2 billion decrease in his stake value due to the stock slide. Trump Media’s market capitalization remains high at $6.7 billion, even though the company reported just $4.1 million in revenue last year.
The company’s CEO, Devin Nunes, emphasized that Truth Social has no debt and over $200 million in the bank, providing opportunities for platform expansion. However, financial details show that Trump Media’s revenue is significantly lower than other social media platforms, raising concerns about its long-term viability.
Despite the attention surrounding Trump Media’s IPO, the platform has not seen a significant boost in user traffic, with daily active users dropping by 23% last week. The company’s stock surge has drawn comparisons to meme stocks like GameStop, but its financial performance remains a point of scrutiny.
Trump’s majority stake in Truth Social’s parent company is currently locked up, preventing him from selling the stock for at least six months. While some investors remain optimistic about a potential rebound in the stock price, others attribute the decline to external factors. The future of Trump Media & Technology Group remains uncertain as it navigates through financial challenges and market volatility.
