Trump Media & Technology Group shares are in free fall.
The share price of the owner of Truth Social fell by another 5% by midday This puts the country on course for its seventh losing day in the last eight.
The only increase during this period was a tiny 0.8% gain on Tuesday.
Trump Media is currently trading below $31, a far cry from its intraday surge to nearly $80 on March 26, the day the stock was listed on the Nasdaq under the ticker symbol “DJT.”
In fact, anyone who bought Trump Media on March 27 at the closing price of $66.22 has now lost more than half of their money.
The sharp sell-off has dented former President Donald Trump’s wealth.
Trump owns a controlling stake of 78.8 million shares in the company, which generates little revenue and is losing users.
At the closing price of Trump Media’s stock, the former president’s stake was worth $5.2 billion. Since then, the value of those shares has plummeted to around $2.4 billion.
“Truth Social has created a free speech beachhead against Big Tech at a fraction of the startup and operating costs of traditional tech companies. We have no debt, over $200 million in the bank, and the support of hundreds of thousands of retail investors who passionately believe in our mission,” Trump Media spokeswoman Shannon Devine said in a statement to CNN.
The heavy losses underline why some experts have warned retail investors to be very cautious with this stock.
Trump Media announced it expects to incur a loss of $58 million in 2023 on very low revenues of just $4.1 million.
And yet the company’s value is still estimated at billions of dollars, leaving experts baffled.
A common way to value stocks is to measure their price-to-sales ratio. Even if Trump Media’s share price crashed to just over $1, it would still have a much better price-to-sales ratio than Meta, Pinterest, Snap, Reddit, or even Rumble, according to Renaissance Capital’s Matthew Kennedy.
Billionaire Barry Diller, chairman of Expedia and owner of People Magazine IAC, even told CNBC that Trump Media is a “scam” and the people who fall for it are “idiots.”
Shannon Devine, a spokeswoman for Trump Media, recently dismissed the criticism, saying it was “not surprising that diehard Trump haters and left-wing press secretaries are freaking out now that Truth Social has become a publicly traded company that, to this day, refuses to suppress political speech.”
Even though Trump Media shares have been falling lately, they are still up more than 74% year-over-year when including profits from the blank-check company it merged with.
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