Last week, the big news was in how Trump Media & Technology Group Corp. (DJT) erupted once it went public.
The stock boomed during its first two days of trading, but the news this week was not so good for the former president and his new social media platform, Truth Social.
On Monday, after a disappointing earnings report was released, the stock crashed.
Big Loss
By Monday afternoon, Trump’s overall net worth dropped by about $1 billion due to the stock’s value decreasing after earnings reports were released.
It is not unusual for companies to post a loss in the early stages of their existence, and one need only look at companies like Amazon to see how that can turn for those playing the long game.
DJT revealed that it had earnings of only $4.1 million in 2023, with a net operating loss of more than $58 million, which was not received well by investors.
The selloff was immediate, with the stock going down by more than 23% by the end of the day on Monday, trading at $48.66 at the close of business.
The company stated, “As of December 31, 2023 and 2022, management has substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG.”
The company is being run by former Rep. Devin Nunes (R-CA), who is paid $750,000 per year for his role as CEO.
Nunes took a lot of heat in the early goings for the lagging development of Truth Social, but the outlet is now running at full speed, save the monetization of the site, which has always been a big question.
Regular social media users have been critical of the site as being nothing more than an echo chamber for Donald Trump.
The platform still only has 8.9 million users, compared to 368 million on Twitter, 3 billion on Facebook, and 2 billion on Instagram.
Now, I realize that Truth Social is still technically a baby in terms of users, but the platform has been very slow to pick up new users after its initial sign-up period.
The current valuation of the company, of which Trump has a 60% stake, is $6.3 billion, which has baffled tech investment experts who believe the company should only be valued at a fraction of that, with some predicting the stock will wind up between $2 and $4 per share.
On Tuesday, the stock had a small recovery, trading at $51.68 near the close of business.
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Author: G. McConway
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