Trump Media Wipes Out All 2024 Stock Gains Just Days Before Donald Trump Can Cash In His $1.95 Billion Holdings

On paper, Trump’s stake in Trump Media and Technology Group (TMTG) is worth $1.95 billion, which could help cover mounting legal penalties.

However, when it agreed to a reverse merger with Digital World Acquisition Company (DWAC) on March 25, it accepted a six-month lock-up period that prevented it from selling 115 million shares.

Trump owns 59% of TMTG shares and any sale could cause the stock to fall in value unless it is done in small batches.

With the lockdown ending in three weeks, investors are becoming increasingly concerned.

Trump’s financial situation appears strained — he has sold Trump-themed sneakers, Bibles with the words “God Bless the USA” written on them, and now he’s offering a piece of the suit he wore during his first debate with Joe Biden to collectors who buy $1,500 worth of Trump digital trading cards.

TMTG shares fell 6% on Wednesday, closing just below $17. That wipes out all of its gains for the year, while the S&P 500 is up 16% over the same period.

TMTG declined to comment, and Trump was not available on Truth Social or X.

Loss-making TMTG is still valued at 1,000 times its revenue

TMTG has lost 80% of its value since it hit a high of $79.38 on March 26, the first day the stock traded under the symbol DJT. At the time, Trump’s personal stake was valued at nearly $9.11 billion.

The stock could continue to fall. Last week, CEO Devin Nunes and CFO Philip Juhan sold $2.5 million worth of stock, further dampening investor sentiment.

Despite a market capitalization of $3.4 billion, the unprofitable social media company trades at more than 1,000 times its annual revenue. Sales in the first half of the year were just $1.6 million, with deeply negative cash flow.

Wall Street analysts shun TMTG because of its “meme stock” status, which doesn’t exactly garner much attention from professional investors. Even if analysts were to look into it, TMTG doesn’t publish key metrics, including the number of active, cashable users.

The stock had been seen largely as a bet on Trump’s reelection. But with polls rising in key swing states and Kamala Harris gaining momentum, that bet is now less certain.

November election result crucial for TMTG share price

Trump was forced to return to Twitter (now X), where he has ten times more followers and a much larger audience, to reach potential voters.

This further dilutes the value Truth Social has to users if they can access its content on other competitor platforms.

However, if he loses in November, Truth Social’s future relevance will diminish significantly as Trump’s political career will likely come to an end.

John Rekenthaler, vice president of research at financial services firm Morningstar, said: Quartz that purchasing TMTG shares is tantamount to purchasing Trump’s personal brand.

“But he won’t have a brand,” he said last week, “if he loses a second consecutive presidential election.”

There is even a scenario in which Trump could sell his TMTG shares around September 20, about five days earlier, provided the price does not fall below $12.

In any case, the sale is likely to involve some legal complications because his son, Don Jr., as a director has access to material, non-public information, including the company’s third-quarter results.

The only way for this excess stock to end well for TMTG investors is for Trump to find a strategic investor in the company who is willing to acquire his shares in their entirety.

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