Donald Trump's media venture, Trump Media & Technology Group (TMTG), has seen a dramatic reversal of fortune as its stock price plummets ahead of a key deadline that could allow the former president to sell his stake. The company, which owns the social media platform Truth Social, has experienced a steep decline in its market value, wiping out the substantial gains it made earlier in 2024. As of Wednesday, TMTG shares closed at $16.98, erasing all progress since the start of the year.
The downturn represents a significant loss for Trump, whose nearly 59% ownership in the company is now worth just under $2 billion-half of what it was at its peak. The stock price has dropped more than 75% from its intraday high of $79.38 per share, reached in March after TMTG's merger with the special purpose acquisition company (SPAC), Digital World Acquisition Corp.
The stock's volatility has been tied closely to Trump's political fortunes, with significant fluctuations reflecting shifts in his standing within the Republican presidential race. Despite a brief surge in mid-July, fueled by public sympathy following an assassination attempt on Trump, the stock has since tumbled as speculation mounts over whether he will offload his shares once the lock-up agreement expires in late September.
This upcoming deadline has become a focal point for investors and market analysts alike. If Trump decides to sell, it could further depress the stock price, leading to a potential crisis of confidence among other shareholders. The prospect of such a move has added to the downward pressure on TMTG's valuation, which now hovers around $3.5 billion-a far cry from the nearly $10 billion it was worth just months ago.
In a statement, a Trump Media spokesperson sought to reassure investors, emphasizing the company's progress in expanding its platform and maintaining a solid financial position. "Trump Media is rapidly building out our platform while maintaining a strong balance sheet," the spokesperson said, highlighting the launch of an in-app streaming service and the company's cash reserves of $344 million with zero debt.
However, these reassurances have done little to stem the stock's decline. TMTG has struggled to generate significant revenue, posting sales of just $4.13 million in 2023 while incurring losses of $58.2 million. The user base of Truth Social remains relatively small, with research firm Similarweb estimating 7.7 million visits in March-a fraction of the 6.1 billion visits to X (formerly Twitter) during the same period.
The company's market performance has been further complicated by its status as a "meme stock," a designation that has driven erratic trading patterns similar to those seen in companies like GameStop and AMC Entertainment. These stocks have experienced rapid rallies fueled by internet-driven hype, often followed by equally dramatic crashes.
The initial announcement of the merger between TMTG and Digital World Acquisition Corp. in October 2021 was met with enthusiasm, but the process has been marred by legal hurdles and delays. Earlier this year, as Trump solidified his position as the Republican front-runner, Digital World's stock saw a surge in trading volume, culminating in the highly anticipated merger in March. Yet, the euphoria was short-lived, with the stock quickly losing momentum.
Adding to the uncertainty, Trump has increasingly appeared on other social media platforms, including TikTok and X, leading some to question his long-term commitment to Truth Social. Despite this, Trump has continued to publicly endorse his platform. In a recent interview with podcaster Lex Fridman, Trump described Truth Social as "very powerful" and "very successful," asserting that it remains a key part of his media presence.
