Trump’s stock fell again after Truth Social announced it was going live

Trump’s stock fell again after Truth Social announced it was going live

Investors in Trump Media & Technology Group stock are wasting their time.

Shares of TMTG (DJT) fell 14% on Tuesday after closing 18% lower on Monday. Driving shares lower on Tuesday: The company’s flagship product, Truth Social, announced a major expansion into streaming, a notoriously cost-intensive business where media giants like Disney have struggled to turn a profit.

Shares of TMTG, which is majority-owned by former President Donald Trump, are down more than 70% from an all-time high set on March 26, a day after it merged with the blank check acquisition company to go public. Although the company is still worth billions of dollars, it is struggling to make money and is desperate for cash. Experts have warned investors to be careful if they choose to trade the stock, as the company has no fundamentals to support its lofty valuation.

Trump Media lost $58 million in 2023 and only earned $4.1 million. So, it announced Monday that it will sell 21.5 million more shares to the public to raise cash — even though that will dilute value for existing shareholders.

Home for ‘suppressed’ content
The streaming initiative doesn’t give investors any reason to be interested in the company. Truth Social said it spent the past six months testing its web, iPhone and iPad apps for live TV streaming, and it hopes to launch a content delivery network to stand up streaming apps for phones and tablets — and eventually smart TVs. Truth Social suggests the streaming network could host live news, religious programming and family-friendly shows, movies and documentaries that “have been canceled, are at risk of cancellation, or are being suppressed on other platforms and services.”

“With our streaming content, we aim to provide a permanent home for high-quality news and entertainment that faces discrimination by other channels and content delivery services,” TMTG CEO Devin Nunes, a former Republican congressman for California, said in a statement. “There’s a lot of great content that can’t find an audience for unfair reasons and we want to let these creators know they’ll soon have a guaranteed platform that won’t be scrapped.”

Truth Social’s latest push sounds similar to Elon Musk’s X, which claims to be the streaming platform that best defends free speech. But X has hundreds of millions of active users — hundreds of times Truth Social’s audience — and still struggles to attract advertisers after Musk reshaped the business, allowing hate speech and conspiracy theories to run rampant on the platform.

Trump’s association with the brand appears to be the main reason for his high ratings. That helps turn stocks into meme stocks — that is, companies don’t trade on fundamentals as much as they trade on emotional responses.

Trump added billions of dollars to his net worth after TMTG’s merger with the blank check company in late March. But its stock value has plummeted from a peak of $5.2 billion to about $1.8 billion. Trump’s net worth fell about $300 million on Tuesday from falling stocks.