Shares of Truth Social, the social media platform launched by former President Trump’s company, Trump Media & Technology Group, have experienced a significant downturn in the past couple of weeks following its initial surge.
According to recent reports, the company’s shares plunged by 8% on Monday, following a 12% drop on Friday. This downward trend has pushed the stock to its lowest level since its trading debut on March 26, indicating a volatile market performance with notable fluctuations.
This decline has had a substantial impact on the value of Trump’s stake in the company. As the majority stakeholder, Trump saw the value of his shares plummet from a peak of over $6 billion during the trading debut to approximately $2.9 billion as of Monday.
Despite this significant valuation, analysts have raised concerns regarding the company’s financial standing. Trump Media & Technology Group reported a loss of $58 million in the previous year, coupled with a modest revenue of just over $4 million. Such figures have prompted skepticism about the inflated value attributed to Trump’s stake.
Moreover, Trump’s ability to offload his shares is restricted until September under the current agreement. However, he retains the option to request permission from the board of Trump Media to divest some of his stake ahead of schedule. Notably, the board comprises individuals with close ties to Trump, including his son, Donald J. Trump Jr., and former administration officials.
Despite warnings from analysts about the detachment of the company’s stock value from its actual financial performance, support for Truth Social persists among individual investors. Many of these investors are believed to be ardent supporters of Trump, contributing to the sustained trading activity of the company’s shares.
