Former President Donald Trump's social media venture, Trump Media & Technology Group (TMTG), is facing a steep decline in market value, erasing billions of dollars from Trump's net worth and casting doubt on the company's future. The stock, which trades under Trump's initials as DJT, has seen its value plummet nearly 70% since its peak earlier this year, wiping out approximately $4 billion in potential wealth for Trump.
The downturn in TMTG's stock price comes as the company struggles to gain traction with its social media platform, Truth Social, and faces increasing skepticism from investors. The stock, which soared when the company first went public in March, has steadily declined, reaching an all-time low of around $17 per share. Trump, who holds a dominant stake of 114 million shares, has seen the value of his holdings shrink from $6.2 billion in May to approximately $2 billion today, knocking him off the Bloomberg Billionaires Index.
This dramatic loss underscores concerns raised by analysts who have questioned the sustainability of TMTG's business model and its reliance on Trump's political fortunes. "If this wasn't Trump, this thing would be trading at $1," said Matthew Tuttle, CEO of Tuttle Capital Management. The company's fundamentals appear weak, with TMTG reporting a mere $837,000 in revenue last quarter while posting a $16 million loss. These financial woes have fueled speculation that the company's value is closely tied to Trump's political success.
Indeed, the stock's performance has mirrored Trump's standing in the polls. TMTG shares have lost nearly half of their value since President Joe Biden withdrew from the 2024 race and endorsed Vice President Kamala Harris. As Tuttle pointed out, "This stock is entirely a Trump-gets-elected play. If Trump wins, this could be a viable company. But if he loses, I don't know how this is a going concern."
Despite the bleak outlook, TMTG is not without resources. The company still holds over $300 million in cash and equivalents, which it could use to fund operations or pursue acquisitions. TMTG has also recently expanded into the streaming market with the launch of Truth+, a platform catering to conservative audiences. However, the company's ability to generate significant revenue from these ventures remains in question.
One looming concern for TMTG is the expiration of a lock-up period that has prevented Trump and other insiders from selling their shares. This restriction is set to expire around September 20, potentially opening the door for a sell-off that could further depress the stock price. While Trump has not indicated whether he plans to sell his shares, the possibility has been flagged as a significant risk in the company's filings. A mass sell-off could undermine investor confidence and drive the stock even lower.
Adding to TMTG's challenges is the competition from other social media platforms. Although Trump initially positioned Truth Social as a primary platform for his communication, he has recently resumed activity on more prominent platforms like X (formerly Twitter) and TikTok. This shift could diminish the appeal of Truth Social, as access to Trump has been a key selling point for the platform. The stock has already lost about a third of its value since Trump's high-profile interview with X owner Elon Musk last month.
TMTG's troubles are compounded by the broader legal and financial challenges facing Trump. The former president is currently appealing court judgments that require him to pay nearly $540 million in damages in two separate cases, one involving allegations of fraud and the other a defamation lawsuit. These liabilities, coupled with the declining value of TMTG shares, could strain Trump's financial position as he prepares for the 2024 presidential campaign.
Despite these setbacks, Trump's supporters remain loyal. Many retail investors who back TMTG view the stock's decline as a temporary setback and continue to hold onto their shares, believing in the company's long-term potential. Chad Nedohin, a Trump Media supporter from Canada, recently posted on Truth Social that the falling stock price was "a hoax to get people to sell."
