Former President Donald Trump's media company appears to be losing its sheen a week after its debut, with shares on Monday tumbling below its opening trading price, shaving more than $4 billion of market value from its peak.
The plunge in Trump Media & Technology Group's shares, which debuted on March 25 under the ticker "DJT" after the former president's initials, comes as it disclosed mounting losses in a regulatory filing. It 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 $14.50, or 23%, to $47.46 in Monday afternoon trading. That's below its opening price last Monday of $49.90 per share, and represents a 40% plunge from its high of $79.38 on March 26.
To be sure, Trump Media continues to maintain a heady market capitalization for a business that's in the red and 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 recent surge in valuation has drawn comparisons to the phenomenon of "meme" stocks like GameStop, which often attract individual investors through social media hype rather than traditional financial metrics like profitability and revenue growth. However, Truth Social has positioned itself as a viable alternative to established tech giants such as Meta's Facebook, despite facing initial losses.
"GameStop may have been the meme stock of a generation, but Trump Media has surpassed it," commented Michael Pachter, an analyst at Wedbush Securities, in a recent statement to the media.
Trump Media & Technology Group recently provided a more detailed overview of its financial performance. The company reported $4.1 million in revenue for the previous year, a notable increase from $1.5 million in the corresponding period. However, it also disclosed a loss of $58 million in 2023, a significant contrast to the $50 million profit in the prior year.
Furthermore, the company's accountants raised concerns about the sustainability of its operations due to the reported losses. Nonetheless, this cautionary note reflects the company's current position, and there is potential for growth in user base, revenue, and a reversal of losses, paving the way for a more stable future.
