I am not a financial advisor nor do I play one on TV. And believe me when I tell you, you don’t need those credentials to have foreseen what has taken place this morning with respect to the ongoing slide of Trump Media and Truth Social into oblivion. Truth Social lost a lot of money on Friday, $600M to be precise, and that was merely the harbinger of what has happened this morning. At the time of writing this post it’s still midday on the east coast and Truth Social could take a bath, a bloodbath if you will, between now and the closing bell.
Pump and dump moved to dump real quick. pic.twitter.com/dNvuLOVbex
— Dude – @hexham67.bsky.social (@Hexham67) April 1, 2024
Anyone who invested in Trump Media has now lost their shirt. pic.twitter.com/0xKiEmj5eD
— Brian Tyler Cohen (@briantylercohen) April 1, 2024
Trump Media’s stock (ticker $DJT for Trump’s initials) tanked 13% by late morning, trading at about $51 per share, a roughly 35% drop from its $79 peak set last Tuesday on its first day as an independently traded public company.
Trump, who owns 78.5 million shares in Trump Media, about 57% of all outstanding shares, accordingly had his stake in the social media venture slide from its peak of $6.25 billion to Monday’s $4.05 billion.
Monday’s freefall came after Trump Media unveiled its full-year 2023 results for the first time, revealing full-year revenues of $4.1 million on a net loss of $58.2 million, with fourth-quarter sales of roughly $750,000.
The uninspiring results for Trump Media, whose primary offering is the conservative social media platform Truth Social, reveal just how rich the company’s $6 billion market capitalization is compared to other public companies. Trump Media’s 1,470 price-to-sales ratio, which compares a company’s total valuation to its last 12-month sales, is exponentially higher than social media peers Reddit and Snap’s respective 9 and 4 price-to-sales ratios. Though Trump Media is a young company with the theoretical potential to dramatically scale its business, many experts classify it as a meme stock whose rise compares to the 2021 surges from the likes of AMC and GameStop. Trump Media went public last week via a reverse merger with Digital World Acquisition Corp. first announced more than two years ago, and its shares jumped as much as 40% in its debut on the Nasdaq stock exchange.
And Trump has walked down this path before, as this video will explain to you.
What is happening here is a sad commentary on American capitalism as much as anything else. Truth Social looked great on the stock market because people were willing to buy the stock — not because the company was sound. It emphatically is not. It’s a meme stock. It may have taken off to the moon initially but you can see it doing an Apollo 13 right now, except not with the same happy ending.
I wonder how many more hours or days before Trump slides off the Forbes richest person list, which he covets membership on so very much?
And I also wonder what Alina Habba will take about in her next podcast? If you caught her podcast yesterday, she was bragging about how incredibly “smart” Trump is and how he’s simply made billions on Truth Social. On paper, honey, on paper. And it could well be that the Truth Social stock is going to be worth what a degree from Trump University is worth at the end of the day.
I sure hope that Devin Nunes is home at his ranch house in California. I wouldn’t want him to be near any high ledges with this going on, would you?
Maybe some older investors started having flashbacks to the dot.com bubble over two decades ago, and started educating younger investors on how much money was lost. Investors including at the institutional level threw tens, sometimes hundreds of millions at start-ups, with younger folks and/or hucksters denigrating traditional metrics and business principles insisting the “fogeys” simply didn’t understand the “new rules.” To a similar extent it was the same kind of thinking that led to the 2008 crash with even more money thrown into new mortgage “finances” and THAT to a certain extend got the bulk of folks with money to burn to go back to fundamentals. Truth Social reminds me mostly of the dot.com bubble however since it’s a tech/internet thing.
You know what I think? Many during the dot.com bubble knew long before it burst that it would do so and set themselves up to “short” huge amounts of those stocks. They made out like bandits. I think Trump might well have taken some steps to do exactly the same thing here. He’d be open to fraud charges I’m pretty sure, but he could walk away with a tidy sum and then spend years fighting the charges in court. With money he collected from his giant scam! It’s a theory but it fits the facts. Think about it. Trump could order his board to waive either the six month lockup period for selling his stock or the ability to use it as collateral for loans and have all the money he needs to post bond right now. Today. Of course it would cause the whole thing to crash overnight and open him up to all manner of lawsuits and even set of fraud charges right away. Neither of which he is in a position to deal with.
Crazy as it sounds, he might be better off allowing Tish James to start going after his assets to protect what could be a much larger payout than his NY state judgement. I’m not a finance person either and haven’t thought all the way through this but I know we have people who read PZ who do know this stuff. I wonder what any of them think of my half-baked thoughts?
The sub-prime mortgage fiasco hurt a lot of people – myself included and I’ve never recovered from those losses. It’s also responsible for the ridiculous inflation in housing costs we’re facing now. As usual, banks and investors come out okay while the rest of us see our life savings disappear.
And the government who should be protecting their citizens prefers to protect their lobbyists.
Left a tab open for DJT today. It dropped $200 mil when I left my computer just to fetch my second cup of coffee. Ah, the sugar in my coffee and I normally don’t take sugar!
Wow, it dropped 2.18% just since the market closed. I think the ones playing the shorts are pulling out now before Trump’s handpicked board allows him to sell some or all of his shares before Thursday despite the so called 6 month waiting period. I would prefer him having to sit on it for 6 months.
Hell, at this rate it won’t last through the end of the week.
You raise the question on everybody’s mind, whether Trump can or will cash out quick? I don’t know what there actually will be to cash out of. The company lost $58M last year (Truth Social) and it made $3.4M, so how is there a big payoff in that?