Trump Media & Technology Group stock fell more than 10% on Friday, hitting its lowest point since debuting on the Nasdaq last week.
Shares in Trump Media, the company behind former president Donald Trump’s social media platform Truth Social, were valued at $41.08 as of Friday afternoon, leaving the company with a market cap of $5.62 billion — a more than $2 billion drop from its first trading day.
This is the company’s lowest stock performance since it entered the market followings its merger with special acquisition company (SPAC), Digital World Acquisition Corp.
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 lumpe Trump Media in with so-called “meme stocks” such as 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 the company’s shares already plunged more than 20% earlier this week 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, in a Securities and Exchange Commission filing. That’s 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 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.