Truth Social: Trump's DJT stock plummets days after going public

Truth Social: Trump's DJT stock plummets days after going public
Truth Social: Trump's DJT stock plummets days after going public

We show you our most important and recent visitors news details Truth Social: 's DJT stock plummets days after going public in the following article

Hind Al Soulia - Riyadh - NEW YORK — Shares of Donald Trump's social media company fell by more than 20% on Monday, less than a week after it began publicly trading under the DJT ticker.

The drop comes after Trump Media & Technology Group reported it had lost nearly $60m (£48m) last year while only bringing in around $4m in revenue.

The price plunge caused the former president's net worth to shrink by $1bn, according to Bloomberg.

Shares had surged last week, giving the company an $11bn valuation.

But experts warned the stock was bound to tumble, as its main product — Truth Social — loses users and burns cash.

The price spike drew comparisons to the pandemic-era "meme stock" mania, when the share prices of companies like GameStop and AMC soared even though basic parts of their businesses, such as revenue, were weak.

Meme stocks are ones that gain sudden popularity on social media, sparking price rises as online investors rush to buy.

On Monday, shares of Trump Media — which makes its money exclusively through advertising on Truth Social — fell $13.30 to $48.66. But they are still up nearly 200% so far this year.

The surge has been driven by small-time investors, at least some of whom appear to be showing support for the former president as his legal troubles, and the bills that accompany them, pile up.

Trump holds a nearly 60% ownership stake in the company and stands to earn a billion-dollar windfall when he cashes out his shares — though he is legally barred from doing so for another six months unless the company's board grants him a waiver.

But these investors are making a bet on a company that, in a special filing on Monday, told the Securities and Exchange Commission (SEC) it "expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future".

According to the financial filing, Trump Media paid about $40m in interest expenses and $16m in operating losses in 2023.

The company said its management had "substantial doubt" that it "will have sufficient funds to meet its liabilities as they fall due".

Truth Social launched in February 2022, about one year after the former president was banned from Twitter (now X) and in the aftermath of the violent riot at the US Capitol.

While Trump's accounts on both platforms have since been reinstated, he has continued to use Truth Social as the main avenue for his social media posts.

But his presence on the platform has not helped it gain a broad audience. Estimates from Similarweb show the company has roughly five million active monthly users, far fewer than rivals.

Truth Social has claimed it has about 8.9 million sign-ups, but it has declined to share the commonly disclosed performance metrics that could give shareholders a better sense of its operations. — BBC

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