Former US President Donald Trump’s media venture, Trump Media & Technology Group, saw its value plummet by $4 billion within a week of its public debut on the Nasdaq Composite Index.
According to a report by CBS News, the company, which launched its primary asset, the Truth Social platform, on March 25 under the ticker “DJT,” has also disclosed escalating losses that have raised concerns about its sustainability.
On Monday, the company’s shares dived by 21 per cent, or $13.30, closing at $48.66. This indicates a 39 per cent drop from its peak of $79.38 on March 26.
Despite this decline, the stock still maintains a 178 per cent surge since the beginning of the year.
Notably, the company’s market capitalisation stands at $6.7 billion, even though it reported a $4.1 million in revenue last year.
Former President Trump, who owns 57 per cent of the company, has seen his paper wealth decrease by $2.5 billion due to the stock’s decline.
His stake, which was valued at $6.3 billion at its highest point last week, now sits at $3.8 billion.
The financial downturn comes at a crucial time for Trump, as he faces growing financial obligations.
However, a lock-up provision prevents Trump from selling his shares for at least six months following the IPO, limiting his ability to access the company’s value.
Although the figures are alarming, Truth Social has made comparisons to “meme” stocks like GameStop, which often attract individual investors based on social media hype rather than traditional financial metrics like profitability and revenue growth.
CBS News quoted Michael Pachter, an analyst at Wedbush Securities, who said, “GameStop was the meme stock of a lifetime, but Trump Media has put it to shame.”
In a recent regulatory filing, Trump Media revealed more detailed financial data, indicating a revenue of $4.1 million last year, up from $1.5 million the previous year.
However, the company also reported a loss of $58 million in 2023, occurring in contrast to the $50 million profit in the prior year.
Despite the warning from its accountants about the company, Trump Media remains optimistic about its growth and profitability.