By Donald Trump likely did not like what he saw when he glanced at the stock market today. The share price of the former president’s social media company, Trump Media, crashed on Monday after the company announced that it was struggling to earn a profit.
“’TMTG expects to incur operating losses for the foreseeable future,’ says the filing, which came a week after the company began trading under the ticker DJT on the Nasdaq,” wrote CNBC.
“The filing also warns shareholders that Trump’s involvement in the company could put it at greater risk than other social media companies.
TMTG also disclosed to regulators that the company had identified ‘material weaknesses in its internal control over financial reporting’ when it prepared a previous financial statement for the first three quarters of 2023.
As of Monday, Trump Media said these ‘identified material weaknesses continue to exist.’”
The stock has initially soared upon changing its ticker symbol to DJT last week.
The former president cannot legally sell his shares for six months, and some analysts have predicted that a Trump-led sell-off would see the price to plummet.
Trump owns over 57 percent of the company.
According to Mediate, the fundamentals do not come remotely close to justifying the stock price. In fact, it brought in just $4.1 million in revenue in 2023 and suffered a net loss of over $58 million. A majority of those losses are attributable to its debt, although its operating costs were still approximately four times higher than its revenue stream,
While the shares could provide the former president with a cash infusion as he continues to struggle to pay various legal fees and penalties resulting from his various civil and criminal trials, there are questions about just how valuable they will ultimately prove to be to him.
Former New York Assistant Attorney General Adam Pollock has argued that the company is “essentially worthless” and Fox Business host Stuart Varney predicted that the stock would crash if it looks like Trump is going to lose his bid to retake the White House.
“I think it’s almost like a meme stock, and that’s the way it’ll play out,” said Varney. “It’s a bet on whether Trump wins or loses in November of this year. If he loses, I think the stock goes way down. If he wins or looks like he’s going to win, I think the stock does well because then Truth Social will do well.”
Truth Social hitting the stock market has been a boon for the former president as he faces extreme fines from multiple lawsuits filed against him by Democrats. Trump said he’d be paying his absurdly high bond to appeal the rulings with cash after Trump Media went public.
The Democratic Attorney General of New York Letitia James has previously claimed that she planned to seize Trump Tower.
The Wall Street Journal reported that “former President Donald Trump is tantalizingly close to tapping a multibillion-dollar windfall that could help pay his legal bills and give a much-needed cash injection to his presidential campaign.
Almost no one saw it coming. Nearly everything went wrong with the get-rich-quick plan for Trump’s social-media platform to go public by riding one of the biggest speculative waves in market history.
As has often been the case with Trump, missteps and obstacles didn’t matter. The combination of luck and his most passionate followers has added a great unknown to the presidential race. And it has suddenly brought everything about social media’s growing influence over financial markets into politics.
‘He’s the ultimate winner, at least on paper,’ said Matt Simpson, managing partner at Wealthspring Capital and an investor in shell companies like the one that took Trump’s firm public.”
The Journal contends that the stock ticker will likely rise and fall based on the sentiment of whether or not Trump will defeat Joe Biden in November.
The business newspaper noted that the former president would likely seek a waiver from the company’s board to allow him to borrow against the stock or sell entirely before his six-month lock-up period expires.
The move would help him finance his campaign against Joe Biden. The Democratic president has been raising tens of millions of dollars to attack Trump and recently raised $25 million in one night during a celebrity-laden fundraiser in New York City held on the same day that the Republican frontrunner attended the wake of a fallen NYPD officer.
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