Donald Trump’s DJT, the social media company Truth Social, shares slumped more than 20% on Monday, just a week after it went open trading on the market, the news that the company was contemplating a filing for bankruptcy drove the share prices down. That loss follows the chart showing a similar Lack of Income from the Trump Media & Technology Group for the year 2022 that amounts to almost $60 million (approximately $48 million) barely $4 million in revenue.
The Bloomberg estimated that there was a $1 billion drop in the net worth of the former president because his stocks fell in share prices.
Last week saw rising share price, which amounted to raise the company stock value up to 11 billion. On the other hand the experts recommended that the stock had to fall down and would do this because the highlight product of the company was Truth Social which was I suppose not innovative and was hemorrhaging users as well as using cash.
The upsurge in stocks was unlike the “freefall” in meme stocks prevailing during the PCM era when firms like GameStop and AMC were able to get higher share prices without the back up of their fundamental business models.
The share price of Trump Media, that are for the most part funded by advertising revenues from the Truth Social platform have risen by nearly 200% in 2023.
Trump is all set to dig into the pocket as he trades with billions of stocks. This jump has been spurred by short-term investors, including some who actively participate in the Trump legal defense teams or who participate in rallies, where they can see the former president.
Mr. Trump has almost a whopping 60% shares in the company; but then he incurred a loss worth a billion dollars which he further succeeded in stopping for a further six months when his company’s board have decided to do otherwise.
Yet the business backgrounder signified in the SEC interests announcement email sent on Monday reads into a company that will run losses and have a negative capital in the future.
Based on the prospectus, the Trump Media lost around $ 40 million in expenses. Also their operations incurred $16 million loss.
The management of the company is “selves” and reasonably confident that they will be legally required to do so, the company said in its filings.
Surprisingly, only a few weeks after Twitter (now R) and Facebook stopped working on accounts following the news of the tragic events at the Capitol, Truth Social was already launched on February of 2022.
Despite Mr. Trump’s reinstatement on Facebook and Twitter, he still shows a more forceful preference for Truth Social for his social media posts.
Although its presence on this platform cannot be denied but it does not allow it to widen its viewers. On the basis of the numbers posted by SimilarWeb, Levi’s only has about 500 thousand monthly active users while its rivals apparently have a much larger group of users.
Yet True Social registers only 8.9 million sign-ups and will not provide common performance metrics which could be key to the knowledge that supports the investment decisions of shareholders.
