Investors in Trump Media & Technology Group’s stock are not optimistic about the company’s future. The stock, majority-owned by former President Donald Trump, has dropped significantly since its all-time high in March. Despite still being worth billions of dollars, the company is struggling to make money and is in need of cash. Experts caution investors against trading the stock due to its lack of fundamentals to support its high valuation.
The company’s premier product, Truth Social, announced a major expansion into streaming in an effort to generate revenue. However, this move caused the stock to plummet even further. Truth Social hopes to launch a content delivery network for streaming apps on various devices. The platform aims to host live news, religious programming, and family-friendly content that has faced censorship on other platforms.
TMTG lost $58 million in 2023 and made only $4.1 million in revenue. To raise much-needed cash, the company announced that it would sell 21.5 million more shares to the public, despite the potential dilution of value for existing shareholders. Trump’s association with the company appears to be a driving factor behind its high valuation, turning its shares into a meme stock that trades largely on emotional responses rather than fundamentals.
CEO Devin Nunes expressed a commitment to providing a platform for content creators who have faced discrimination on other channels. This push for streaming content is reminiscent of Elon Musk’s X platform, which also emphasizes free speech. However, X has significantly more users and has struggled to attract advertisers due to its tolerance of hate speech and conspiracy theories. Truth Social is attempting to carve out a niche in the streaming market by offering a platform for banned or suppressed content.
Despite initial success following its merger with a blank-check acquisition company, TMTG has seen a decline in Trump’s net worth as the stock value has plummeted. Trump added billions of dollars to his net worth after the merger, but has since lost a significant portion of that wealth. The company’s financial struggles and the lack of a solid revenue stream have led investors to lose faith in the stock, causing a dramatic drop in its value.
In conclusion, Trump Media & Technology Group’s stock has experienced a steep decline in value, prompting investors to sell their shares. The company’s attempts to expand into streaming have not garnered much enthusiasm from investors, and its financial struggles have raised concerns about its long-term viability. Despite the association with former President Trump and the initial hype surrounding the merger, the company’s lack of fundamentals and inability to generate substantial revenue have led to a loss of faith among investors. It remains to be seen whether Truth Social’s streaming platform will be able to turn the company’s fortunes around.
