Trump Truth Social Stock Takes a Nose-Dive, Loses Billions

Former President Donald Trump's foray into the social media space with Truth Social suffered a serious setback when its stock plummeted 25% and lost more than $4 billion in value just one week after its public debut.

Shares of Trump Media & Technology Group traded as "DJT" plunged 25% to $46 a share after blowing up to a high of $79 only days earlier. Trump is the majority in the company, and his investment went from 6.25 billion dollars to 3.64 billion dollars amid the freefall of the stock.

The decline came as Trump Media revealed its poor financials: Full-year revenues of $4.1 million and an eye-watering net loss of $58.2 million in 2023. The revelation shed doubt on the valuation of the company, whose price-to-sales ratio was way above peers like Reddit and Snap.

Undeterred by this, the valuation of Trump Media remains lofty-an unprecedented $6.7 billion in league with meme stocks like GameStop. Truth Social is positioning itself as a rival to technology giants such as Meta's Facebook. How it will get to profitability and grow revenue is very open to question.

What's more, Trump's stake in the company is locked up for at least six months, offering him scant opportunities to realize any value from the stock. That might mean that Trump tries to get a waiver or borrows against his shares to ease any financial pressures, analysts said.

Given how up in the air the future of Truth Social remains, this rollercoaster ride in its stock serves as a harbinger, signifying just how wild the social media landscape has gotten and how tough it is to convert that hype into growth that will last.