A peculiar dichotomy has emerged in the life of Donald Trump, where his political prospects are gaining momentum, while his financial empire is experiencing a downturn. Despite recent polls indicating a surge in support 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.
The former president’s 59% stake in TMTG, which was previously valued at over $9 billion, has now dwindled to a mere $1.4 billion. This decline is attributed to a six-month lockup period following the company’s reverse merger with a blank check investment vehicle, as well as Trump’s recent announcement that he has no intention of selling his nearly 115 million shares of stock.
TMTG’s stock has been shunned by financial analysts due to its lack of transparency regarding its business metrics. As a result, there are no estimates available for this year’s revenue, earnings, or losses. Applying a similar price-to-sales multiple to that of Reddit would value TMTG at a mere $25 million, a fraction of its current market capitalization of $2.4 billion.
Trump’s latest merchandising venture, the sale of one-ounce silver coins featuring his likeness for $100 each, has raised eyebrows among investors. This move is seen as an attempt to generate cash to meet legal fines in the hundreds of millions of dollars, as Trump’s unencumbered assets are limited.
Chamath Palihapitiya, an early Facebook investor, had predicted that TMTG’s stock would be a “directional bet on the value of his brand,” akin to a collectible item. However, Trump’s recent declaration that he wouldn’t run again for the presidency if he loses in November may have inadvertently hurt his own investment story, as it reduces his influence on shaping the Republican party.
As Trump’s financial fortunes continue to dwindle, it remains to be seen how this will impact his political ambitions. One thing is certain, however: the value of his brand is no longer the golden goose it once was.
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