Trump’s Social Media Company Suffers Massive Stock Decline, Wiping Out Billions
Former President Donald Trump’s media venture, Trump Media & Technology Group (DJT), is witnessing a severe financial downturn. The company, which owns Truth Social, has seen its stock plummet to record lows since going public earlier this year, eroding a significant portion of Trump’s wealth. According to a recent report by CNN, the company’s stock has fallen by 72% since reaching its peak in March.
Trump’s stake in the company, previously valued at $6.2 billion in May, has now dropped to approximately $2.1 billion. This significant decrease has removed him from Bloomberg’s list of the world’s 500 richest individuals.
Market Concerns and Expert Warnings
Financial experts have long expressed concern about the overvaluation of Trump Media, with critics noting the company generates minimal revenue and faces mounting losses. Matthew Tuttle, CEO of Tuttle Capital Management, highlighted that the company’s stock performance hinges on Trump’s political success. He stated, “If this wasn’t Trump, this thing would be trading at $1.” Others, such as LinkedIn co-founder Reid Hoffman and billionaire Barry Diller, have also questioned the company’s inflated valuation.
Political Ties to Stock Performance
The sharp decline in stock value also coincides with the political landscape shifting. Trump Media has lost around half of its market value since President Joe Biden exited the race and endorsed Vice President Kamala Harris in July. Tuttle emphasized that the company’s future relies heavily on Trump’s potential re-election.
“This stock is entirely a Trump-gets-elected play,” Tuttle said, suggesting that Trump’s loss could jeopardize the company’s viability.
Looking Ahead: Challenges and Potential Moves
Despite the stock’s poor performance, Trump Media holds over $300 million in cash and equivalents. The company is also making strategic moves to expand its footprint, launching a conservative streaming platform, Truth+, in August. However, looming challenges remain, including the expiration of a lock-up period in mid-September, which may allow insiders, including Trump, to sell shares—potentially putting further pressure on the stock.
While some hope remains for a reversal of fortunes, experts caution investors to approach the stock with care. “You must keep politics and profits separate,” Tuttle warned. “If you’re holding onto this because you’re a Trump fan, that’s just stupid. You invest to make money.”
