A peculiar disconnect has emerged between the political prospects of Donald Trump and the financial performance of his social media venture. Despite gaining traction in key battleground states, shares in Trump Media and Technology Group (TMTG), the parent company of Truth Social, have plummeted to an all-time low. This stark contrast has raised eyebrows, as the former president’s political fortunes were previously seen as closely tied to the company’s stock price.
The latest polls suggest Trump is making headway in Georgia, Arizona, and North Carolina, yet TMTG’s stock has been in free fall, closing down 10% on Monday to reach a record low of $12.15. This marks the sixth consecutive day of heavy selling, wiping out nearly 85% of the company’s value since its peak in March. Trump’s 59% stake in TMTG, once valued at over $9 billion, has dwindled to a mere $1.4 billion.
The lack of transparency surrounding TMTG’s business metrics has led financial analysts to shun the stock, with not a single estimate available for this year’s revenue or earnings. Applying a comparable price-to-sales multiple to TMTG’s stock would result in a market capitalization of around $25 million, a fraction of its current $2.4 billion valuation.
Trump’s recent merchandising efforts, including the launch of a silver coin featuring his likeness, have raised suspicions among investors. With legal fines mounting and limited liquid assets at his disposal, Trump’s assurances that he won’t sell his TMTG stake are being met with skepticism. The former president’s decision to rule out a future presidential bid has also likely diminished the value of his brand, making it uncertain whether TMTG’s stock can recover from its current slump.
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