Former President Donald Trump’s social media company’s stock market slide continued Monday, as the more than $10 billion valuation scored by Trump’s company’s just two weeks ago looks to be fleeting.
Shares of Trump Media, the majority Trump-owned parent of the right-wing social media platform Truth Social, fell 11% Monday to just above $36.
That’s some 54% below the peak $79 per share Trump Media fetched on March 26, its first day of trading under its DJT ticker upon the completion of its reverse merger with blank-check company Digital World Acquisition Corp.
The value of Trump’s 58% stake in Trump Media, has accordingly cratered in the 13-day stretch, falling from $6.25 billion to $2.86 billion.
That knocked his net worth from its March peak of more than $7 billion to $4.7 billion, according to Forbes’ estimates.
Big Number
$40 million to $90 million. That’s about how much Truth Social is worth by applying the same valuation metrics – average revenue per user and market value to revenues – typically used to evaluate social media companies. Trump Media’s price-to-sales ratio of roughly 1,250, based on its $5 billion market value and its $4 million in 2023 sales, is more than 100 times higher than the price-to-sales ratio of Reddit, a social media company which went public at about the same time that some on Wall Street fear is overvalued based on its fundamentals.
Key Background
Truth Social went live in early 2022 about a year after Twitter, Facebook and Instagram suspended Trump for his role in the Jan. 6, 2021 Capitol riots. Trump Media went public via a special-purpose acquisition company (SPAC) rather than an initial public offering after nearly 2.5 years of regulatory hurdles. Trump’s bans from mainstream social media platforms have since been lifted, but he continues to use his Truth Social account as his primary mouthpiece. In its short time on the public market, Trump Media has not behaved like a typical stock, perhaps best evidenced by its reported status as the most expensive American company to bet against, as investors who take a short position on Trump Media, predicting the share price will go down, have to shell out about $1 per day to brokers taking the other side of the trade, about 1,000 times the fees typically associated with short trades.
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