Shares of Donald Trump‘s social media company plunged 21% on Monday, wiping out the gains from its debut last week, after disclosing millions in losses and saying it would struggle to meet its financial liabilities going forward.
Trump Media & Technology Group lost more than $58 million in 2023, it said in a filing, sending shares reeling less than a week after the Truth Social parent went public through a high-profile blank-check merger.
The stock surged in its March 26 debut to close at nearly $58 a share on retail buyer enthusiasm, including supporters of Trump, the likely Republican nominee in 2024’s presidential election.
But Monday’s disclosure reversed that trend, sending shares down $13.30, or 21%, to $48.66.
“Truth Social was overvalued and that reality is dragging down the stock. Because the service does have not have a clear path to profitability and its revenues are meager, its high debut was unsustainable,” said Ross Benes, analyst at Insider Intelligence.
Trump owns 78.75 million shares, which could result in a big windfall for the former president, depending on their value. At the stock’s peak last week, his stake would have been more than $6 billion, but after the selloff it would be valued at about $3.8 billion. Trump is not allowed to sell or borrow against any of his shares for six months – and any move by him to try to alter that agreement would likely trigger more selling.
Even with the stock’s decline, it still has a market value of more than $6 billion, compared with social media platform Reddit’s market capitalization of $8 billion.
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