Trump Media & Technology Group on Tuesday announced plans to launch a streaming TV platform dedicated to showcasing news, films, and other content that the company claims is overlooked by traditional media outlets.
This move comes in the wake of Trump Media's recent debut on the Nasdaq stock market, initially valuing the company at $10.8 billion. However, the stock, trading under the symbol DJT, has seen a significant decline of nearly 70% since reaching a peak of $79.38 per share on March 26.
On the latest trading day, Trump Media shares fell by $3.29, or 12.4%, to $23.32, bringing the company's market value down to approximately $3.1 billion.
One of Trump Media's key assets is Truth Social, a social media platform established in 2022 by Donald Trump after his removal from major social media platforms following the events of January 6 at the U.S. Capitol. The company's vision has always been to build a comprehensive "media powerhouse" encompassing various platforms, including social media and digital streaming. Up to this point, Truth Social was the only platform introduced by the company.
Trump Media's decision to go public has provided a financial boost to the company, with CEO Devin Nunes mentioning on Fox Business that they currently have "$200 million in the bank" to support their future endeavors.
When it comes to establishing a prominent media company, the key factor lies in building a substantial audience that can attract advertisers. Despite Trump Media not disclosing its user numbers, data from web analytics company Similarweb suggests that the service had approximately 494,000 monthly active users in February. This pales in comparison to Facebook's 142 million and X's (formerly known as Twitter) 75 million users. This could explain why Trump Media's revenue for last year stood at $4.1 million, roughly half of what an average Chick-fil-A location generates in annual sales, while incurring a $58 million loss. Notable advertisers on Truth Social include groups like Patriots for America, which sells Trump hats, and USA Gear, offering American flag hoodies.
Trump Media has not yet commented on the matter.
Trump's Strategy for Streaming
Trump Media has announced that its streaming TV platform will debut on the Truth Social app before expanding to home TV streaming. However, the company has not provided a specific timeline for this rollout.
"There is a lot of valuable content that struggles to reach an audience for unjust reasons, and we want to assure these creators that they will soon have a secure platform where they won't face cancellation [sic]," stated Nunes, a former Republican congressman from California.
The company also mentioned that its TV content will encompass "news networks, religious channels, family-friendly content such as films and documentaries, and other content that has been cancelled, is at risk of cancellation, or is being suppressed on other platforms and services."
Without a doubt, there are conservative-leaning TV networks that already exist, such as One America News Network (OANN) and Christian Broadcast Network, the producer of the 700 Club. Additionally, conservative commentator Tucker Carlson launched his Tucker Carlson Network after parting ways with Fox News last year.
Declining stock value
On the other hand, one of the primary assets of Trump Media, its publicly traded stock, continues to decrease in value. This is significant because one way for a publicly traded company to raise additional funds is through secondary stock sales. If the stock value diminishes, it can impede the company's ability to raise capital from the public market.
Trump Media's stock dropped by 18.4% on Monday following the filing of a regulatory document that paves the way for a potential sale of millions more shares. This document, known as an S-1, pertains to warrants held by investors that can be converted into stock shares, as well as shares held by company insiders.
According to Ben Emons, senior portfolio manager at NewEdge Wealth, Trump Media's stock is at risk of further decline. Emons mentioned in an April 15 research note that the price of the warrants, which grant holders the right to purchase stock at a specific price, has fallen by 43% from its peak on March 26, indicating a possible decrease in share price to $17.50.
"While there is potential for the DJT stock price to recover, it is likely to decrease initially," Emons added.
