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Truth Social: Trump’s DJT Stock Plummets Days After Going Public

Donald Trump’s Truth Social has been on a wild ride since its recent public debut, trading under the DJT ticker. The platform’s stock initially soared, only to plummet by over 20% on Monday, raising concerns about its future.

Truth Social’s parent company, Trump Media & Technology Group, revealed significant losses of nearly $60 million in the past year, with minimal revenues of around $4 million. This drop in stock value reportedly caused a billion-dollar decrease in Trump’s net worth, according to Bloomberg.

A screen displays trading information about shares of Truth Social and Trump Media & Technology Group, outside the Nasdaq Market site in New York City, U.S., as at March 26, 2024. REUTERS/Brendan McDermid

The platform’s ups and downs have drawn comparisons to the frenzy of “meme stocks” during the pandemic, where stocks like GameStop and AMC surged despite weak business fundamentals. Experts had warned of a potential fall, citing Truth Social’s struggle to retain users and financial challenges.

Despite these setbacks, Trump Media, which relies solely on advertising revenue from Truth Social, has seen its shares surge by nearly 200% since the start of the year. This surge has been largely driven by individual investors, some showing support for Trump amidst his legal battles.

Navigating Regulatory Hurdles and Financial Struggles

While Trump holds a significant ownership stake in the company, regulations prevent him from cashing out his shares for another six months. However, investors are betting on a company that admitted in a recent filing to the SEC the likelihood of incurring operating losses in the future.

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Financial filings show that in 2023, Trump Media incurred approximately $40 million in interest expenses and $16 million in operating losses, raising concerns about its long-term viability. The company’s management has expressed doubt about its ability to meet financial obligations.

Launched in February 2022, Truth Social aimed to fill the gap left by Trump’s ban from major social media platforms like Twitter and Facebook. Despite claiming approximately 8.9 million sign-ups, the platform has struggled to attract a broad audience, with only five million active monthly users.

While Truth Social’s future remains uncertain, its journey highlights the challenges of entering the competitive social media landscape. Its success will depend on its ability to overcome these hurdles and establish itself as a credible player in the industry.

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