Trump Media’s inexplicable ascent came crashing down on Monday, as shares of the social media firm plunged more than 21 percent, knocking roughly $1billion off former President Donald Trump’s net worth.
Despite the precipitous drop, his 57 percent stake in the business is still worth over $3 billion.
The firm, which began trading last month after merging with a public shell company, has benefited from so-called “meme stock” investors who have driven up its share price despite its abysmal financial performance. In 2023, the company generated revenues of just $4.1 million and posted a loss of $58.2 million, according to public filings.
Even after Monday’s crash, the company is still worth over $6 billion on paper. Trump, who faces hundreds of millions of dollars in legal judgments, can’t yet sell his shares, due to a six-month lock-up provision for key company insiders.
Trump Media’s main product is Truth Social, a rival to X, the Elon Musk-owned platform formerly known as Twitter.
Donald Trump migrated to Truth Social after he was booted from Twitter over what the company called “the risk of further incitement of violence” following the Jan. 6, 2021 attack on the U.S. Capitol. Truth Social has had more than 9 million sign-ups since its inception, the company said in its filings, though it cautioned that its operations are not exactly sophisticated.
“Investors should be aware that since its inception, TMTG has not relied on any specific key performance metric to make business or operating decisions. Consequently, it has not been maintaining internal controls and procedures for periodically collecting such information, if any,” the filings said.
Former Republican Congressman Devin Nunes serves as Trump Media’s CEO. The firm got a cash infusion of more than $300 million as part of its deal to go public. Without that money, it may have gone out of business, the filings acknowledged.
It remains to be seen whether Trump media can maintain its lofty share price long enough for the former president to cash in. According to The New York Times, Trump Media is currently the most shorted stock on Wall Street.
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