Donald Trump Stands to Lose Billions as Truth Social Stock Continues to Crash

Donald Trump's media venture, Trump Media & Technology Group (TMTG), once soared to a $10 billion valuation, with the company behind Truth Social generating buzz as a meme stock. However, things have taken a sharp turn. The stock price has plummeted by 69% from its peak, wiping out billions of dollars in gains, and now the former president stands to lose big.

How Much Could Trump Lose?

When Trump Media first hit the market, Trump’s stake was worth an astonishing $4.9 billion. Today, the value has dropped to $2 billion, and with continued stock market declines, this could fall even further. Trump is currently prohibited from selling his shares until late September due to a lock-up agreement, but the timing couldn’t be worse. The stock’s downward spiral could leave Trump facing losses amounting to hundreds of millions, if not billions, once he can offload his shares.

Furthermore, TMTG isn't generating the kind of revenue it needs to recover. In 2023, the company reported only $4.13 million in sales but faced a loss of $58.2 million. The user base of Truth Social remains small, with only 7.7 million visits in March 2024, paling in comparison to competitors like X (formerly Twitter) which had 6.1 billion visits in the same period.

Truth Social's Questionable Foundations and Shareholders' Frustrations

Amid the financial turmoil, there have been rumors suggesting that the company behind Truth Social might be a front for foreign donations. While these claims have raised eyebrows, Trump Media has firmly denied any wrongdoing. According to a spokesperson, there’s “no conceivable sign anywhere” that Trump plans to sell shares in TMTG or that the company is engaged in illegal activities. However, these denials haven't stopped speculation from spreading among concerned investors.

Investors who bought into the initial meme stock frenzy of TMTG now find themselves watching their investments crumble. One shareholder, who wished to remain anonymous, voiced their concerns: “We believed in the platform because of its promise to counter mainstream media, but it’s become a financial disaster. Now we’re stuck watching the value of our shares sink, and it’s hard to see a way out.”

Others, while still loyal to the former president, are now questioning their decision to invest in Truth Social. With the platform’s user numbers stagnating and financial performance lacking, optimism is dwindling. “We thought this was the next big thing, but it’s looking more like a sinking ship,” another investor said.

Is There a Path Forward for Truth Social?

Despite the doom and gloom, some die-hard supporters of Trump and Truth Social believe that the stock’s recent fall could be a temporary setback. They argue that the lock-up period ending in September could attract new investors, giving the stock a chance to bounce back. However, with mounting competition from established social media giants and a shaky business model, the outlook for Trump’s media company appears grim.

The bottom line: Trump could face massive financial losses from his media venture, potentially jeopardizing a significant portion of his fortune. As the lock-up period comes to an end, and more insiders sell their shares, the market is likely to see increased volatility, leaving shareholders in a tough spot.

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