It's worse than I thought.
Trump's media company is now trading below its opening stock price. The company on Monday disclosed mounting losses.
www.cbsnews.com
Former President Donald Trump's fledgling media business is losing its sheen among investors a week after going public, with a sharp reversal in the company's stock price lopping $4 billion off its value.
The plunge in Trump Media & Technology Group's shares, which
debuted on the Nasdaq Composite Index on March 25 under the ticker "DJT" (after the former president's initials), comes as it disclosed mounting losses in a
regulatory filing. The company also noted that its accountant had issued a warning that its losses "raise substantial doubt about its ability to continue as a going concern."
Shares of Trump Media & Technology Group, whose primary asset is the Truth Social platform, tumbled $13.30, or 21%, to $48.66 on Monday. That's below its opening price last Monday of $49.90 per share, and represents a 39% plunge from the stock's high of $79.38 on March 26.
Still, the stock remains higher than before
a deal that took Trump's media company public last week. The shares had previously traded under the name Digital World Acquisition Corp., a shell company designed to take Truth Social public. Even after Monday's dip, the stock has surged 178% this year.
Trump, who owns 57% of the newly public company, has lost $2.5 billion — at least on paper — because of the stock slide. His stake is now worth $3.8 billion, down from $6.3 billion at the stock's peak last week.
To be sure, Trump Media continues to maintain a heady market capitalization for a business that's in the red and that booked just $4.1 million in revenue last year. Even after Monday's stock plunge, the business is worth $6.7 billion, making it more valuable than companies like Bausch & Lomb, Alcoa Corp. or Harley-Davidson, all of which have annual revenue in the billions.
Trump Media's soaring valuation has prompted comparisons with so-called
"meme" stocks like GameStop, which typically attract individual investors based on social media buzz, rather than the tried-and-true yardsticks relied on by institutional investors, such as profitability and revenue growth.
Yet Truth Social has positioned itself as an alternative to more established tech giants such as Meta's Facebook, which also endured losses in its early years.
"GameStop was the meme stock of a lifetime, but Trump Media has put it to shame," Michael Pachter, an analyst at Wedbush Securities, told the Associated Press last week.
Trump Media & Technology Group on Monday disclosed more details about its finances. The company booked $4.1 million in revenue last year, compared with $1.5 million in the year-earlier period. It also posted a loss of $58 million in 2023, compared with a profit of $50 million in the prior year.
Additionally, it noted that its accountant flagged that the company's losses raise doubts about its ability to continue operating. Such a warning, however, reflects the company's current situation; the company could grow its user base, revenue and reverse its losses, putting it on a more stable path.
It's yet another example, like Tesla, of companies "valued" at a rate a magnitude above what they're actually worth. Our entire economy is based off of complete bullshit like this. It is all a house of cards based on cult-like followings and nothing more. The truth is that Tesla, if properly valued, wouldn't be worth $40.00 per share and Trump Media would be worth less than 25 cents per share.
When they both go belly up, and they will, the idiots that invested in it will cry and play the victim. Know what? Fuck all of you idiots. You will get
EXACTLY what you deserve.
www.cnn.com
