Donald Trump's stake in Truth Social is down $2.4 BILLION since stock market debut last week - as shares plunged further 21% today after full scale of company's losses emerged

Donald Trump's social media company has lost a third of its value since the share price peaked on its stock market debut last week. 

Trump's stake alone has dropped more than $2.4billion since its March 26 debut amid claims that Truth Social is just a meme stock and fresh concerns about its ability to ever make money. 

On Monday, shares - already down from the peak - plunged a further 21 percent after parent company Trump Media revealed in a filing that it lost $58 million in 2023 on the back of just $4 million in revenue. Bosses also admitted there would no profits soon.

'Truth Social was overvalued and that reality is dragging down the stock. Because the service does have not have a clear path to profitability and its revenues are meager, its high debut was unsustainable,' said Ross Benes, analyst at Insider Intelligence. 

On its stock market debut last Tuesday, Truth Social parent company Trump Media rocketed to an $10.7 billion valuation at one point last week when shares hit $79.38. Trump's 58 per cent take was was worth $6.2 billion.

Shares were down $13.30, or 21 percent, to $48.66 at market close Monday

As of Friday, Trump Media - when it had a market capitalization of more than $8 billion - had a price-to-sales ratio more than 50 times higher than that of chip maker Nvidia

Donald Trump's 58 percent share of Trump Media is now worth more than $5 billion and his net worth has skyrocketed - but he may struggle to access the cash

The surge last week came was driven by retail buyer enthusiasm, including supporters of Trump, the likely Republican nominee in 2024's presidential election.

Monday's disclosure reversed that trend, sending shares down $13.30, or 21 percent, to $48.66. That cut the company's value to $6.6 billion.

Read more: How DailyMail.com reported concerns that Trump Media is a meme stock

 

TrumpStop! Donald's Truth Social value rockets in value even though a single McDonald's makes more in a year... so is 'DJT' just a meme stock like GameStop? 

Trump owns 78.75 million shares, which could result in a big windfall for the former president - if they stop falling in value.

At the stock's peak last week, his stake would have been more than $6.2 billion, but after the selloff it is valued at $3.8 billion. 

Trump is not allowed to sell or borrow against any of his shares for six months - and any move by him to try to alter that agreement would likely trigger more selling. 

'TMTG enjoyed a huge run-up on hype and enthusiasm, but it is a long way off from becoming a true scaled social media challenger to X (Twitter), Instagram, TikTok and other platforms,' said Michael Ashley Schulman, analyst at Running Point Capital. 

Truth Social's revenue was $4.13 million last year, up from $1.47 million in 2022, it said. By comparison, Reddit brought in revenue of $800 million in 2023.

The latter has 73 million active users, whereas Truth Social only discloses its total number of sign-ups, which come to 8.9 million. 

In its filing on Monday, TMTG said it has no plans to disclose key metrics generally used by similar companies.

The filing also said: 'As of December 31, 2023 and 2022, management has substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG.'

The filing added the company 'expects to incur operating losses for the foreseeable future.' 

Trump Media is also embroiled in a legal battle with co-founders Wesley Moss and Andrew Litinsky. 

On Monday, a Delaware judge said he wanted the parties to set a hearing date this month to determine if the two should receive the 8.6% stake in the company they claim they are owed.

Trump Media and the pair have sued each other in Delaware and Florida state courts. The co-founders accused Trump Media of trying to improperly dilute their stake, while the company said they had failed to earn their shares and that it wants to strip them of their ownership.