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Trump Media & Technology Group Faces Steep Stock Decline
Trump Media & Technology Group stock plunged another 10% on Monday, hitting new lows as the shares continued their free fall from opening-week highs. Shares of Trump Media, the company behind former President Donald Trump’s social media platform Truth Social, were trading at $36.33 late Monday afternoon — down more than $40 from a high of $79.38 per share on the stock’s opening day on the public markets.
Financial Performance
The fall has left the company’s market capitalization hovering around $5 billion, down from highs of more than $8 billion during its first trading week. Trump Media stock recovered some ground late in the day to close down 8.4%, at $37.17 per share. The company’s stock began its downward trajectory last week after it disclosed a loss from operations of almost $16 million in 2023, plus interest expense of $39.4 million, while bringing in just $4.1 million in revenue.
That’s compared with a loss from operations of $23.2 million, plus interest expense of $2.0 million, on $1.5 million in revenue in 2022. Trump Media reported in a Securities and Exchange Commission filing that it “lacks the financial resources it needs to sustain operations for a reasonable period of time,” raising “substantial doubt” as to its ability to continue operations. The company said it expects to continue incurring operating losses and negative cash flow “for the foreseeable future.”
Positioning and Profitability
Devin Nunes, the CEO of Trump Media and a former U.S. House member from California, mentioned in an interview that the company is “well positioned” despite concerns over its profitability. “Why are we well positioned? Because we have no debt,” Nunes said on Fox News. “We’re coming out of this with no debt, a platform that works really well that communicates to millions of people, and then we have $200 million in the bank.” He did not specify when he expects the company to be profitable.
Market Speculation
Trump Media went public on the Nasdaq under the ticker DJT late last month, after completing its merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC). Analysts noted that the company’s initial stock surge was more influenced by support for Trump rather than its underlying business, likening Trump Media to other “meme stocks” such as GameStop, AMC, and Reddit.
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