Trump Media & Technology Group stock fell more than 10% on Friday, hitting its lowest point since debuting as a publicly traded company last week.
Shares in Trump Media, the company behind former President Donald Trump’s social media platform Truth Social, traded at $41.08 mid-afternoon Friday, giving the company a market cap of $5.62 billion — a more than $2 billion drop from its first trading day. The stock was trading at its lowest level since Trump Media entered the public market following its merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC),
Trump Media debuted on the Nasdaq under the ticker DJT on March 26. The company quickly shot to a more than $8 billion market cap, a rise analysts said had little to do with its underlying business and more to do with support for Trump. Several analysts lumped Trump Media in with so-called “meme stocks” such GameStop, AMC, and Reddit.
Meme stocks refer to company shares that become wildly popular online and are traded feverishly by retail and individual investors, sending prices soaring regardless of the company’s actual operating results or prospects.
But Trump Media stock already plunged more than 20% earlier this week. That came after the company reported a loss from operations of almost $16 million, plus interest expense of $39.4 million, while bringing in just $4.1 million in revenue, according to a Securities and Exchange Commission filing. The results compared with a loss from operations of $23.2 million, plus interest expense of $2.0 million, on $1.5 million in revenue in 2022.
Trump Media disclosed in the SEC filing that it “lacks the financial resources it needs to sustain operations for a reasonable period of time,” which it defined as one year from Monday, raising “substantial doubt” as to its ability to continue operations. The company said it expects to continue incurring operating losses and negative cash flow “for the foreseeable future.”
Trump owns 57.3% of Trump Media shares.