Trump’s Truth Social Venture Results in $4 Billion Loss

Former President Donald Trump’s social media venture is experiencing a significant downturn, leading to a major erosion of his net worth.

Shares of Trump Media & Technology Group (DJT), which includes Truth Social, fell to their lowest level since the merger that took the company public this spring. Although there was a slight 7% rebound on Monday, Trump Media has lost nearly 72% of its value since its peak of $66.22 on March 27. This decline has resulted in substantial losses for investors, including Trump himself.

Trump’s substantial stake of 114.75 million shares, valued at $6.2 billion on May 9, has plummeted to approximately $2.1 billion. This dramatic drop has caused Trump to fall off the Bloomberg Billionaires Index of the world’s 500 richest people.

This decline reinforces concerns from experts who have criticized Trump Media’s multi-billion-dollar valuation as unrealistic. The company is struggling financially, with minimal revenue, and Truth Social remains a minor player in the social media landscape. Matthew Tuttle, CEO of Tuttle Capital Management, remarked to CNN, “If this wasn’t Trump, this thing would be trading at $1.”

Billionaire Barry Diller has referred to Trump Media stock buyers as “dopes,” while LinkedIn co-founder Reid Hoffman has described the company’s valuation as “absurdly out of the realm of normal.” Both Diller and Hoffman are notable Democratic donors.

Analysts suggest that other factors may be contributing to the company’s declining share price. Tuttle points out that Vice President Kamala Harris’s close polling with Trump could be influencing the stock’s performance. Since President Joe Biden withdrew and endorsed Harris on July 21, Trump Media’s market value has halved.

“This stock is entirely a Trump-gets-elected play,” Tuttle stated. “If Trump wins, this could be a viable company. But if he loses, I don’t know how this is a going concern.”

Trump Media has not responded to CNN’s request for comment. Despite these challenges, the company holds over $300 million in cash and equivalents, which could support acquisitions and operations. Additionally, Trump Media is developing a streaming service, Truth+, which launched in August on various platforms.

However, a potential issue looms with the approaching expiration of the lock-up period, ending September 20, which will allow insiders, including Trump, to sell shares. Experts warn that significant selling could further depress the stock price.

While there is a chance that Trump Media’s fortunes could improve, particularly with Trump’s high-profile debate with Harris, Tuttle advises caution to retail investors. “I am a huge believer that you must keep politics and profits separate,” he said. “If you’re holding onto this for dear life because you’re a Trump fan, that’s just stupid. You invest to make money.”