Truth Social loses half of its market value

Truth Social, Donald Trump's social media network, is experiencing a decline in the market.

by Faruk Imamovic
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Truth Social loses half of its market value
© Getty Images/Scott Olson

Truth Social, Donald Trump's social media network, is experiencing a decline in the market. Since May 30, when Trump was indicted on 34 felonies in the hush money case, the value of Trump Media & Technology Group (TMTG) stock has fallen dramatically.

In the past three weeks, the stock price (DJT) has fallen by a 50%, wiping nearly $3 billion from the estimated net worth of Trump, the company's major shareholder and chairman.

Experts warn of possible further losses

“The stock is still wildly overpriced,” says Jay Ritter, a finance professor at the University of Florida who has studied capital markets for four decades per CNN. The problem is that TMTG is still worth billions of dollars despite generating very little revenue.

In the first quarter of this year, TMTG posted revenue of just $770,500, the second consecutive quarter with less than $1 million in revenue. That said, Truth Social remains a small player in the world of social networking, far behind platforms like X (formerly Twitter), Reddit, and Instagram Threads.

Matthew Kennedy, senior IPO market strategist at Renaissance Capital, points out: “This is a development-stage company with a multi-billion-dollar valuation,” TMTG recently received approval from the Securities and Exchange Commission (SEC) for a registration statement.

This approval clears the way for early investors to exercise their warrants to purchase additional shares. While the move could bring nearly $250 million to TMTG, it could also dilute existing shareholders' holdings by significantly increasing the number of shares available.

Devin Nunes, CEO of TMTG, said: “Today marks another milestone for Truth Social,” Trump Media CEO Devin Nunes said in a statement on Tuesday. “With our S-1 declared effective, we’re expecting to be well positioned to energetically pursue TV streaming, other enhancements to the platform, and potential mergers and acquisitions”. However, experts warn that this could further affect the share price, which is already under pressure.

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