Shares of Trump Media & Technology Group are in free fall.
The Truth Social owner’s share price dropped another 5% as of mid-day Friday, leaving it on track for a seventh losing day out of the past eight.
The only gain during that span was a tiny one of 0.8% on Tuesday.
Trump Media is now trading below $31. That’s a far cry from the intraday spike to nearly $80 on March 26, the day it went public on the Nasdaq under the ticker symbol “DJT.”
In fact, anyone who bought Trump Media at the closing high of $66.22 on March 27 has now lost more than half of their money.
The steep selloff has put a dent in former President Donald Trump’s net worth.
Trump owns a dominant stake of 78.8 million shares in the company, which generates little revenue and is losing users.
At the closing high for Trump Media’s stock price, the former president’s stake was valued at $5.2 billion. The value of those shares has since plummeted to about $2.4 billion.
“Truth Social created a free-speech beachhead against Big Tech for a fraction of the start-up and operating costs that the legacy tech corporations incurred. We have no debt, more than $200 million in the bank, and the support of hundreds of thousands of retail investors who fervently believe in our mission,” Trump Media spokesperson Shannon Devine said in a statement to CNN.
The steep losses underscore why some experts warned retail investors to tread very lightly with this stock.
Trump Media disclosed losing $58 million in 2023 on very light revenue of just $4.1 million.
And yet the company is still being valued in the billions of dollars, leaving experts scratching their heads.
One 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 steeper price-to-sales ratio than Meta, Pinterest, Snap, Reddit or even Rumble, according to Renaissance Capital’s Matthew Kennedy.
Billionaire Barry Diller, the chairman of Expedia and People Magazine owner IAC, even told CNBC that Trump Media is a “scam” and people buying it are “dopes.”
Shannon Devine, a Trump Media spokesperson, recently denounced the criticism, saying it’s “unsurprising to see die-hard Trump haters and leftwing flacks blow a gasket now that Truth Social has become a public company that, still today, refuses to suppress political expression.”
Even though Trump Media stock is tumbling lately, it does remain up more than 74% on the year when accounting for gains from the blank-check company it merged with.
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