Donald Trump’s foray into the realm of social media faced a tumultuous start as shares of his eponymous company experienced a staggering decline of over 20% on Monday. This decline came hot on the heels of the company’s recent debut on the stock market, trading under the ticker symbol DJT.

The abrupt plummet in share value followed a sobering revelation from Trump Media & Technology Group, disclosing a substantial loss of nearly $60 million (£48 million) in the previous year, juxtaposed against meager revenue figures of approximately $4 million. Bloomberg reported that this downturn caused a notable dent in the former president’s net worth, slashing it by a staggering $1 billion.

Initial optimism had fueled a surge in share prices during the company’s first week of trading, catapulting its valuation to an impressive $11 billion. However, this upward trajectory proved short-lived, as industry experts cautioned that such a rapid ascent was unsustainable. This cautionary sentiment stemmed from concerns surrounding the viability of the company’s flagship product, Truth Social, which has been hemorrhaging users and funds.

Analogies were drawn between this rollercoaster stock performance and the phenomenon of “meme stocks” witnessed during the pandemic era. Much like companies such as GameStop and AMC, whose share prices soared despite underlying weaknesses in their business fundamentals, Trump’s social media venture experienced a surge driven by fervent online chatter and speculative trading.

The term “meme stocks” refers to stocks that gain sudden and significant popularity on social media platforms, leading to a frenzy of buying activity from online investors seeking quick gains. Despite the initial fervor surrounding Trump’s venture into social media, the reality of its financial challenges prompted a sobering reassessment of its market prospects.

Monday saw Trump Media’s shares, reliant solely on Truth Social advertising revenue, decline by $13.30 to $48.66. However, despite this downturn, they have surged by almost 200% since the beginning of the year

Trump Anticipates Billions as Stock Market Deal Clears Hurdles”

The remarkable surge in Trump Media’s shares has been predominantly fueled by individual investors, many of whom seem to be expressing solidarity with the former president amidst his escalating legal challenges and mounting financial obligations.

With Mr. Trump holding an ownership stake nearing 60% in the company, speculations abound regarding a potential windfall of billions when he eventually divests his shares. However, such a cash-out is subject to a six-month waiting period, unless the company’s board grants him a waiver.

Yet, these investors are placing their faith in a company that, in a recent filing with the Securities and Exchange Commission (SEC), openly admitted to anticipating ongoing operational losses and negative cash flows for the foreseeable future.

According to the disclosed financials, Trump Media grappled with significant financial burdens in 2023, shelling out approximately $40 million in interest expenses alongside $16 million in operating losses. The company’s management even expressed “substantial doubt” regarding its ability to meet impending financial obligations with available funds.

The backdrop to this financial saga is the debut of Truth Social in February 2022, emerging approximately a year following Mr. Trump’s ban from major social media platforms like Twitter (now X) and Facebook, in the aftermath of the tumultuous events at the US Capitol.


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