Shares of Trump Media & Technology Group, the company behind the Truth Social platform, fell to a record low during trading on Friday, marking a significant milestone as it was the first day that former President Donald Trump was allowed to sell his stock in the firm. At the market’s opening, the stock price plummeted nearly 7%, reaching $13.73 per share, which brings the company’s total valuation to under $3 billion. Trump is reported to own over half of the company, with his stake valued at approximately $1.6 billion based on this share price.
Following the public debut of TMTG in March, Trump’s shares faced a storm of volatility attached to news cycles surrounding him, particularly given his candidacy for the Republican nomination in the upcoming presidential election. Insiders like Trump were unable to sell during a standard “lock-up” period, which prevents major shareholders from liquidating their holdings immediately after a company goes public.
The share price had experienced extreme fluctuations in the months leading up to this recent trading day. For instance, just a week ago, TMTG’s stock surged nearly 12% after Trump declared he wouldn’t sell his shares as the lock-up restriction was lifted. However, sentiments shifted dramatically following a recent debate with Vice President Kamala Harris, precipitating a decline of over 10% in share value.
TMTG’s previous peak was an impressive $79.38 upon its launch. Since then, however, the company has faced serious financial struggles, reporting a staggering loss of $58.2 million last fiscal year while generating only $4.1 million in revenue. The stark contrast between hype and actual financial performance raises concerns about the longevity and sustainability of the company in a cutthroat market.
The platform Truth Social was created as an alternative following Trump’s bans from major social media platforms like Twitter and Facebook after the events of January 6, 2021. Despite its initial hype, Trump Media is now grappling with the challenges of establishing a viable revenue stream and overcoming the impact of his polarizing presence in the media landscape.
As the trading scenarios unravel and more developments occur, investors and observers alike will be closely monitoring how Trump Media & Technology Group navigates its next steps in a fast-paced and ever-changing financial world.