Former US President Donald Trump’s media group is facing a steep decline on Wall Street, with its value plummeting by nearly 60% since its initial public offering (IPO) two weeks ago. The Trump Media and Technology Group (TMTG) saw its valuation soar to almost $11 billion during its first day of trading on March 26, but it is now worth only $4.4 billion, with the stock closing at $32.41 on Thursday.
This drop has had a significant impact on Trump’s fortune, as he controls 57.3% of TMTG shares. The former president is also facing two court rulings that could require him to pay over $500 million if his appeals are unsuccessful. Despite this setback, Trump will not be able to sell any of his shares for the first six months of trading without explicit authorization from the board of directors.
Experts are expressing skepticism about the company’s future prospects, with TMTG only reporting $4 million in revenue for 2023 and a net loss of $58 million. This stark disparity between revenue and market capitalization has raised concerns about the company’s long-term viability.
The valuation of TMTG has been compared to “meme stocks” like GameStop, fueled by short-term speculators and individual investors with ideological motivations. While some investors may be banking on a potential resurgence if Trump wins a second term and continues to utilize the Truth Social platform, others are wary of the company’s lackluster financial performance.
In light of these developments, analysts are casting doubt on TMTG’s ability to generate significant profits in the near future, especially given the broader challenges facing the media industry. As the company’s fortunes continue to fluctuate, Trump’s media venture is facing an uncertain future on Wall Street.