NEW YORK – Shares of a social media firm associated with former President Donald Trump took a nosedive on Wednesday, causing the company’s market value to drop below $5 billion for the first time. The plummet in stock prices resulted in Trump being removed from the list of the world’s 500 wealthiest individuals, with Forbes now ranking him at 699th place.
Trump Media and Technology Group’s stock, trading under the ticker symbol “DJT,” experienced a significant decrease of up to 10%, with shares priced at $34.30 each at 3:20 p.m. in New York. The company’s stock has plummeted by over 40% since the beginning of the month, causing Trump’s personal wealth to decrease to an estimated $4.5 billion.
According to Bloomberg, trading in options for Truth Social’s parent company significantly declined, with only 70,500 contracts being exchanged on Wednesday, a third of the previous 10-day average. The company’s turbulent performance on the Nasdaq stock exchange, where it debuted in late March, initially saw its stock surge by 67%, boosting Trump’s wealth to nearly $7 billion due to his 58% stake in the company.
However, concerns have arisen among investors about the company’s future following Trump Media’s disclosure of a $58 million net loss in 2023, coupled with minimal revenue of $4 million. The company, in an SEC filing, admitted to anticipating ongoing operating losses and negative cash flows in the near future, alongside acknowledging “material weakness” in its financial reporting controls.
Media mogul Barry Diller criticized Trump Media last week, labeling it a “scam.” The uncertainty surrounding Trump potentially selling his stake, either after a lockup period expires or with a waiver from the board, poses a threat to further tanking the company’s share price in the future.
As Trump Media continues to strive for user growth, advertiser engagement, and partnership development, the company faces a challenging road ahead to regain investor confidence and stabilize its financial standing amid mounting doubts about its viability in the competitive social media landscape.