Billion-dollar grave Truth Social Trump shares are a disaster for investors
Yesterday, Monday, the shares of Trump Media & Technology Group (TMTG for short) plummeted by over ten percent. The stock closed the NASDAQ trading day at 12.15 US dollars - its lowest level since the IPO in March 2024. The big sell-off could now be imminent.
No time? blue News summarizes for you
- The shares of Donald Trump's media company TMTG continue to lose massively in value.
- Yesterday, Monday, the stock plummeted by over ten percent.
- There is no end in sight to TMTG's deep red figures.
Donald Trump wanted to hit the big time with the social media platform and supposed Twitter alternative Truth Social. Spreading his own truths online especially for his voters - and at the same time earning a lot of money with the company behind the platform. With share prices rising after the IPO, the plan seemed to work. The shares, which were placed at 49.95 dollars, climbed to around 67 dollars on their first day of trading. Fueled by Trump fans, TMTG briefly rose to a market value of almost 10 billion US dollars.
However, things are no longer going well for the Trump stock. In mid-July, the share was trading at just over 40 US dollars. The assassination attempt on Trump in Pennsylvania and the TV duel with Joe Biden, in which the Democrat cut an extremely poor figure, boosted the share price temporarily. Since then, it has been on a relentless downward trend.
Poll results send shares on a downward spiral
The success of the Trump share is inextricably linked to the ex-president's personal success. But in the hot phase of the US election campaign, Trump is increasingly faltering. According to the latest polls, Vice President Kamala Harris is continuing to make up ground.
This is not least due to the TV duel between Donald Trump and Kamala Harris. The Democrat managed to lure Trump out of his shell time and again and corner him with factual arguments. Trump, on the other hand, once again became entangled in lies about abortions in the ninth month, that children could be "executed" after birth or pet-eating migrants in Springfield.
Lockdown period expired, loyalty bonus gone
Among the hard-nosed realists on the financial markets, Trump's false claims led to head-shaking - and an enormous loss of confidence. After the debate, Trump Media shares plummeted by up to 17% to below 20 dollars, reaching a new low since the IPO. The company has still not been able to stop the downward spiral.
Market strategists also see the downward trend as a reaction to the end of the lock-up period, during which shareholders are not allowed to sell their shares. The lock-up period expired last Thursday. It remains to be seen whether investors will remain loyal to Trump and TMTG shares. However, the share price performance of the past few days does not seem to indicate this.
Will Trump sell his shares?
The end of the lock-up period also marks a crucial date for Trump himself. According to CNBC, the former US president holds 114,750,000 shares and therefore around 57% of the company. As cocky as ever, Trump denied a sale of his shares last week: "No, I'm not selling. I'm not getting out. I love it. I think it's great." However, it is doubtful whether the notorious liar will keep his word.
Especially as Trump is currently in urgent need of cash. After all, the litigation and legal costs of recent months have hit the bank hard. A further fall in the share price could further erode Trump's capital. A sale would be tempting for him, especially as the share is already considered hopelessly overvalued. Despite the current share price losses, Trump's 57% stake in the company still amounts to just over 1.5 billion dollars.
Trump fans fear for their shares
The end of TMTG's deep red figures is not in sight. The latest quarterly report shows considerable financial problems with net losses amounting to several million dollars. At the same time, the company has hardly any income worth mentioning. "With a quarterly turnover equivalent to just two Starbucks stores, the current stock market value of around USD 3 billion looks like a complete bubble," according to the share community "sharedeals.de".
If Trump were to sell shares, the share price could plummet completely. This would have devastating consequences for Trump supporters, many of whom have invested their savings in Trump shares as loyal followers. The loss is already immense.