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Shares in Donald Trump’s Truth Social, his venture into social media as a rival to Twitter, plummeted following the revelation of over $58 million in losses last year, intensifying concerns among investors.
Despite its ambitious launch, Truth Social struggled in 2023, reporting meagre revenue of $4.1 million for the year, primarily derived from advertising, which declined to $751,000 in the final quarter. The disappointing financial performance triggered a sell-off in the stock market, with shares of Trump Media & Technology Group, the parent company of Truth Social, plummeting over 22%.
Last week’s buoyant debut on the New York stock market saw Trump Media briefly reach a valuation of $7 billion, but the recent downturn has brought its market value down to approximately $4 billion. As a major stakeholder, Trump bore the brunt of the losses, witnessing an estimated $2 billion decline in the value of his shares.
Trump Media’s public offering through a merger with Digital World Acquisition Corporation provided financial relief to the former president, grappling with mounting legal expenses and presidential campaign funding challenges. Trump faces multiple legal challenges and civil lawsuits, jeopardizing his personal wealth and diverting resources from his political aspirations.
Despite warnings from investors about Truth Social’s overvaluation, the stock’s public debut defied expectations, initially appearing to offer Trump a significant financial boost. However, the platform’s modest revenue generation and technical issues have cast doubts on its long-term viability as a competitor to established social media platforms.
Trading under the ticker symbol DJT, the stock’s future remains uncertain, with Trump subject to restrictions on selling or leveraging his shares for six months following the merger with Digital World. Nevertheless, speculation abounds regarding potential maneuvers by Trump to circumvent these constraints, given his influential position within the company.
As Trump seeks to shore up his financial resources for legal battles and his political ambitions, he faces significant fundraising challenges compared to his Democratic counterpart, Joe Biden. Biden’s campaign has consistently outpaced Trump in fundraising efforts, exacerbating the financial pressure on the former president’s campaign and legal defense efforts.
As the presidential race heats up ahead of the November elections, Trump grapples with fundraising disparities and mounting legal hurdles, underscoring the uncertainties surrounding his financial and political future.
