Former President Donald Trump’s social media company, Trump Media & Technology Group (DJT), is in a deep slump, losing nearly three-quarters (72%) of its value since peaking at $66.22 on March 27. Despite a brief rebound on Monday, the stock has dropped to its lowest level since the merger that brought the owner of Truth Social public this spring.
Trump’s dominant stake of 114.75 million shares was valued at $6.2 billion on May 9, but it’s now down to about $2.1 billion. This significant drop in value has knocked Trump off the Bloomberg Billionaires Index of the world’s 500 richest people.
Experts have repeatedly warned that Trump Media’s multi-billion-dollar price tag defies logic, citing weak fundamentals and a lack of revenue generation. Even supporters like CEO Matthew Tuttle of Tuttle Capital Management believe that the company’s value is overinflated, stating, “If this wasn’t Trump, this thing would be trading at $1.”
The slump has also been attributed to Vice President Kamala Harris being neck-and-neck with Trump in some polls, which analysts believe could impact the company’s share price. Additionally, the looming expiration of the lock-up period that prevents Trump and other insiders from selling shares could further exacerbate the issue.
Despite the challenges, Trump Media is still sitting on more than $300 million in cash and equivalents, which it could use to make acquisitions and fund its operations. The company has also launched Truth+, a TV streaming platform catering to conservatives, which could potentially attract new users.
However, experts caution that it would be difficult for Trump to sell his shares without crashing the stock. Investors are advised to focus on the fundamentals rather than politics when considering this stock. As Tuttle said, “I am a huge believer that you must keep politics and profits separate. If you’re holding onto this for dear life because you’re a Trump fan, that’s just stupid. You invest to make money.”
Source: https://edition.cnn.com/2024/09/09/business/trump-stock-truth-social/index.html