The inexplicable rise of Trump Media ended in a steep fall on Monday as shares of the social media company plunged more than 21 percent, wiping about $1 billion off former President Donald Trump’s net worth.
Despite the steep decline, his 57 percent stake in the company is still worth over $3 billion.
The company, which began trading last month after merging with a publicly traded shell company, benefited from so-called “meme stock” investors who drove up the share price despite its dire financial situation. In 2023, the company generated just $4.1 million in revenue and posted a loss of $58.2 million, according to public filings.
Even after Monday’s crash, the company is still worth more than $6 billion on paper. Trump, who faces hundreds of millions of dollars in court judgments, cannot yet sell his shares because of a six-month lock-up period for key company insiders.
Trump Media’s main product is Truth Social, a rival to X, the Elon Musk-owned platform formerly known as Twitter.
Disaster for Trump: Truth Social crashes at crucial moment of State of the Union address
Donald Trump switched to Truth Social after being fired from Twitter because the company feared “the risk of further incitement of violence” following the attack on the U.S. Capitol on January 6, 2021. Truth Social has seen more than 9 million signups since its founding, the company said in its filings, but warned that its operations are not exactly sophisticated.
“Investors should be aware that since its inception, TMTG has not relied on any specific performance metrics to make business or operating decisions. Consequently, the Company has not maintained internal controls and procedures to regularly collect such information, if any,” the documents state.
Former Republican congressman Devin Nunes is CEO of Trump Media. The company received a cash injection of over $300 million as part of its IPO. Without this money, the company might have gone bankrupt, the documents say.
It remains to be seen whether Trump Media can maintain its high share price long enough for the former president to profit from it. According to The New York TimesTrump Media is currently the most shorted stock on Wall Street.
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