Donald Trump's Truth Social's future doesn't look that good. Here's why - Hindustan Times
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Donald Trump's Truth Social's future doesn't look that good. Here's why

Apr 13, 2024 06:46 AM IST

Truth Social’s stock takes a rollercoaster ride in the market, as Donald Trump’s shares see a decline, cutting value by about $2.6 billion

The passively negative influence of this week has resulted in a fall of 25% regarding the stock of Trump Media and Technology Group Corp (TMTG) and a pronounced decrease in the cost to sell.

Republican presidential candidate former President Donald Trump's stake value was cut short by about $2.6 Billion. (Photo by JOE RAEDLE / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)(Getty Images via AFP)
Republican presidential candidate former President Donald Trump's stake value was cut short by about $2.6 Billion. (Photo by JOE RAEDLE / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)(Getty Images via AFP)

Former US President Donald Trump's brainchild, TMTG's stocks have gone through a recreational ride since the Nasdaq trapeze debut.

The stock, which had earlier hit a new high at $68.27, with the closing price on March 27, has now dropped below its original level, ultimately closing at $32.59 as of last Friday. The market sentiments have totally crashed upon the organization in that the group's market capitalization was reduced from being over $9.5 billion to approximately $4.55 billion.

Trump's 57.6% stake in TMTG is still in place, though we have witnessed a massive drop in its market value from around $2.9 billion, currently determined as $2.6 billion. A lock-up stipulation of at least half a year duration applies to selling shares by the founders together with the executive officers among others.

In the April 1 submission with SEC. Trump Media reveals its full-year financial statement of 2023 including its expenditure and budget. Financial numbers indicate gross sales that reached $41.3 million along with a $15.97 million worth of operating loss and $58.19 million net loss.

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At the present price of $31.40, the $0.10 coastal fee per share per day is only the remaining expense under the lowered borrow fee of 124%.

Critics have been vocal about their scepticism regarding TMTG's viability

Barry Diller, chairman of IAC, minced no words when he labelled Trump Media a “scam” during a recent appearance on CNBC. He went on to say that the ones who are investing in the company are “dopes.”

However, a spokesperson for Trump Media defended the company's financial standing. They highlighted Truth Social's role as a platform striving to provide a heaven for free speech amidst what they describe as “harsh censorship by Big Tech corporations.” The spokesperson also pointed out the absence of debt, a healthy cash reserve exceeding $200 million, and the backing of a base of retail investors who share their vision.

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Trump Media & Technology Group's journey into the public markets started on March 26 through a merger with Digital World Acquisition Corp, trading under the ticker symbol “DJT.”

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