Former US President Donald Trump’s social media venture, Trump Media & Technology Group, experienced a $4 billion drop in value within a week of its public debut on the Nasdaq Composite Index. According to a CBS News report, the company, which released its primary asset, the Truth Social platform, on March 25 under the ticker “DJT,” has also acknowledged rising losses, raising doubts about the company’s future.
On Monday, the company’s shares fell by 21%, or $13.30, closing at $48.66. This represents a 39% decline from its peak of $79.38 on March 26.
Truth Social has drawn comparisons to “meme” stocks like GameStop
Despite this decline, the stock has surged 178% since the beginning of the year. The company’s market capitalization currently stands at $6.7 billion, despite reporting only $4.1 million in revenue last year. Former President Trump, who owns 57% of the company, has seen his paper wealth decrease by $2.5 billion due to the stock’s decline. His stake, valued at $6.3 billion at its highest point last week, is now worth $3.8 billion. This financial downturn comes at a crucial time for Trump, as he faces growing financial obligations. However, a lock-up provision prevents Trump from selling his shares for at least six months following the IPO, limiting his ability to access the company’s value.
While the numbers may be concerning, Truth Social has drawn comparisons to “meme” stocks like GameStop, which often attract individual investors based on social media hype rather than traditional financial metrics such as profitability and revenue growth. CBS News quoted Michael Pachter, an analyst at Wedbush Securities, who remarked, “GameStop was the meme stock of a lifetime, but Trump Media has put it to shame.”