The first annual report of the parent company of Donald Trump’s platform, Truth Social, clearly contained a statement that contained an inescapable truth.

The report, released on April 1 by Trump Media and Technology Group, aptly stated: “The value of the TMTG brand could decline if President Trump’s popularity suffers.” This was cited as a “risk factor” for holding the company’s stock.

So, that’s where we are now. Since July 21, when President Joe Biden ended his re-election campaign and endorsed Vice President Kamala Harris as Trump’s opponent, the stock has been on a downward trend.

Trump Media and Technology Group recognizes the limits of Donald Trump’s duty to use his own social media platform

From then until Tuesday, shares of the company, which has Trump’s initials (DJT) as its ticker symbol, lost nearly 39 percent of their value. (The broader stock market, as measured by the Standard & Poor’s 500 Index, has gained nearly 2 percent over the same period.)

The stock has gained in value only five times and lost 17 times during this period. On Tuesday, the stock closed at $21.42, a decline of 82 cents or 3.71 percent, after having already fallen by 3.56 percent the previous day.

In the context of DJT’s grand history as a public company, that’s not so remarkable. Measured from its closing price of $57.99 on March 26 when it went public, the stock is down about 63 percent. Measured from its high of $79.38 that it reached that day before falling back down, the loss is 73 percent. Choose whichever of these calculations you prefer; each of them fits the dictionary definition of “ugly.”

It’s entirely possible that by the end of trading on Tuesday, DJT will have recovered some or all of its daily loss and even emerge from the longer-term crisis it currently appears to be trapped in. The stock’s volatility makes GameStop seem like a sober, stable financial asset.

However, the headwinds are increasing, even though this was never a secret.

The biggest headwind, of course, is the one hinted at in this annual report: Trump himself. Since Biden’s withdrawal upended the presidential race and pushed Kamala Harris to the forefront, Trump’s prospects of winning the November election have dropped significantly.

Read more: Column: Trump may be making money with his Truth Social shares – but his investors have reason to cry

The story continues

In parallel, Trump’s rhetoric and behavior on the campaign trail have become increasingly insane and frenzied. While his standing among MAGA supporters has remained stable, his appeal among independent voters appears to have declined – certainly not improved. Given that DJT is seen as a proxy for his campaign, his decline in value is not surprising.

But other counterweights have gained prominence. One of them is what Trump plans to do with his own shares in the company, which, according to financial reports, accounted for 59.9 percent of the total stock as of mid-July. Trump will be allowed to sell all or part of those shares starting in mid-September, when a six-month lock-up period expires.

Any indication that Trump plans to unwind his DJT stake would almost certainly send the stock price plummeting. Fears that he plans to abandon his outside investors, as he has done with investors, partners and customers of other companies, may explain some of the stock’s weakness.

Trump owns such a large stake in the company that he may be able to raise a billion dollars or more through stock sales before other shareholders have a chance to exit without taking a loss.

Trump has already shown that he doesn’t take his responsibility to support Truth Social very seriously. He established the platform as a branded alternative to Twitter (now X) after he was kicked off Twitter following the January 6 insurrection. However, there is no contractual obligation for Trump to use Truth Social as his exclusive social media outlet.

A provision of his licensing agreement with DJT requires him to post his personal social media communications to Truth Social six hours before they are published on other platforms.

But his contract with the company allows him to publish “politically relevant” posts on any platform he wants – and he alone determines which posts fall into that category. The company says it has “no meaningful recourse” if it disagrees with its classification of posts as “politically relevant.”

Elon Musk restored Trump’s account on X in November; he posted there infrequently until becoming more active recently. And Trump has posted some tweets on that platform. Most notably, he met with Musk on August 12 for a two-hour, confused and glitchy “interview” on X, not Truth Social.

Then there’s the company’s status as a going concern. It publishes all the disclosures required of a publicly traded company in the U.S., but anyone reading them would be wise to open a window first.

Read more: Column: Trump’s media company goes public and makes him billions. Why should anyone invest in it?

Financially, the company still has a market capitalization of $4 billion, but it is nothing like what value investing pioneers Benjamin Graham and David Dodd could have imagined. In its most recent quarterly report on August 12, it reported a loss of $344 million on revenue of $1.4 million for the first six months of this year.

These numbers should not shock anyone who has followed Trump’s career even moderately closely – nor the fact that the stock has performed so well despite these numbers.

Truth Social was a joke from the start – a joke on many of the same people who still fly “Trump Won” flags in their front yards or wear red MAGA hats in mixed company. As I wrote before the IPO, the company went public via a special purpose acquisition company (SPAC), a process often used to circumvent government disclosure rules for investors. SPACs have fallen out of favor because so many of these deals have failed; Truth Social had the highest profile of all, but its fate could not be any different.

In that first annual report, released on April 1, the company said it hardly considers itself a true social media company. It said it had no plans to “collect, monitor or report” the traditional metrics used by other social media platforms, such as “average revenue per user, ad impressions and rates, … monthly and daily active users” — in other words, all the statistics that tell a social media company who, if anyone, is using it and what their participation is worth in dollars and cents.

Having this information would only “distract” management, the report said, but it was unclear how management could develop a strategy for the future if it did not know where it currently stands and how many users it has.

I wrote in 2021, when the SPAC deal to take Truth Social public was first announced, that it would set a new milestone for dubious investment schemes. In April, a month after the IPO, I wrote that Trump might end up going to the bank laughing, but his investors would be left with tears.

We are well on our way to that glorious moment when I can say, “I told you so.” Or maybe we’re already there.

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This story originally appeared in the Los Angeles Times.