Trump Has Lost $4 Billion in Truth Social Wipeout

Former President Donald Trump’s social media venture, Trump Media & Technology Group, has suffered a significant blow, with its stock value plummeting and erasing approximately $4 billion from his net worth.

Shares of Trump Media, the parent company of Truth Social, fell to their lowest point since the company’s merger and public listing earlier this year. Despite a brief 7% rebound on Monday, the company has lost nearly 72% of its value since reaching a high of $66.22 on March 27.

Trump’s substantial stake of 114.75 million shares was valued at $6.2 billion in early May but has since dwindled to around $2.1 billion. This drastic drop has led to Trump being removed from the Bloomberg Billionaires Index, which ranks the world’s wealthiest individuals.

Experts have long criticized Trump Media’s high valuation, pointing out that the company is unprofitable, generates minimal revenue, and Truth Social remains a minor player in the social media landscape. “If this wasn’t Trump, this thing would be trading at $1,” said Matthew Tuttle, CEO of Tuttle Capital Management.

The downturn has been attributed to various factors, including the company’s poor financial performance and political dynamics. Analysts suggest that Trump’s lagging performance in polls, particularly against Vice President Kamala Harris, has contributed to the stock’s decline. Since President Joe Biden endorsed Harris on July 21, Trump Media’s market value has halved.

Trump Media has yet to respond to requests for comment. The company still holds over $300 million in cash reserves, which could be used for future acquisitions or operational expenses. Additionally, Trump Media recently launched Truth+, a streaming service aimed at conservative audiences, in an effort to boost its revenue.

The company is also facing the imminent expiration of a lock-up period that has prevented insiders from selling their shares. This restriction is set to end on September 20, potentially allowing Trump and other major shareholders to sell their stock, which could further impact the share price.

Despite these challenges, some investors remain hopeful that Trump Media’s fortunes could improve, particularly with the former president’s upcoming debate with Harris. However, Tuttle advised caution, warning that investing based on political affiliations rather than financial fundamentals could be unwise. “You invest to make money,” Tuttle said. “Keep politics and profits separate.”