Trump’s net worth falls to $1B as Truth Social shares sink

Alex Omenye
Alex Omenye

Donald Trump saw a staggering $1 billion decrease in his net worth following a 21% drop in shares of his social media endeavor, prompted by the lackluster revenue performance of Truth Social, the platform he launched.

The filing revealed that Trump Media & Technology Group incurred losses surpassing $58 million in 2023. This revelation rattled the market, especially coming less than a week after the company’s highly publicized merger debut, as initially reported by the Wall Street Journal.

The stock had initially surged during its March 26 launch, driven by retail investor enthusiasm and strong backing from Trump’s supporters, elevating the former US President’s net worth to $7.2 billion. However, Monday’s disclosure swiftly reversed this trend, causing shares to plummet by $13.30, or 21%, settling at $48.66. Trump holds approximately 57% stake in the company.

Reports suggest that Truth Social had been overestimated, with the stock’s decline attributed to its lack of a clear path to profitability and minimal revenues.

Despite the setback, Trump’s substantial ownership in the company remains notable. With 78.75 million shares, his stake could still yield significant returns, although the recent decline has diminished its value. Notably, Trump is prohibited from selling or leveraging his shares for the next six months, with any attempts to circumvent this agreement risking further selloffs.

Nevertheless, Trump Media & Technology Group still boasts a market value exceeding $6 billion, albeit lower than social media platform Reddit’s $8 billion market capitalization. However, it lags far behind established social media giants like Twitter, Instagram, and TikTok.

The decline in TMTG’s stock also provided relief for short sellers, who saw significant gains on Monday, offsetting some of their earlier losses. Despite reporting increased revenue, Truth Social still pales in comparison to its counterparts, with Reddit recording revenue of $800 million in 2023, dwarfing Truth Social’s $4.13 million.

Moreover, the company’s reluctance to disclose key metrics and its uncertain financial outlook have raised concerns among investors. Management’s expressed doubts about TMTG’s ability to meet its liabilities in its filing further compound uncertainties surrounding the company’s future.

Additionally, Trump Media is embroiled in legal disputes with its co-founders, Wesley Moss and Andrew Litinsky, adding another layer of uncertainty to the company’s precarious situation.

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