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In this photo illustration, Truth Social, the social media platform of former President Donald Trump, Republican presidential candidate, is shown on a cellphone March 25, 2024 in Chicago, Illinois.
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CNN
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Investors in Trump Media & Technology Group stock are throwing in the towel.
Shares of TMTG (DJT) fell 14% on Tuesday after closing down 18% on Monday. Driving the stock lower Tuesday: The company’s flagship product, Truth Social, announced a major expansion into streaming, a notoriously expensive business in which media giants like Disney have struggled to turn a profit.
Shares of TMTG, majority owned by former President Donald Trump, are down more than 70% from an all-time high reached on March 26, the day after it merged with a blank check acquisition company to enter in stock exchange. Even though the company is still worth billions of dollars, it is struggling to make money and desperately needs cash. Experts have warned investors to be careful if they choose to trade the stock, as the company lacks the fundamentals to back up its sky-high valuation.
Trump Media lost $58 million in 2023 and only made $4.1 million in revenue. So, it announced Monday that it would sell an additional 21.5 million shares to the public to raise cash — even though it would dilute the value for existing shareholders.
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The streaming initiative has given investors no reason to get excited about the company. Truth Social said it has spent the past six months testing its web, iPhone and iPad apps for live TV streaming, and hopes to launch a content delivery network to bring streaming apps to phones and tablets – and eventually for smart TVs.
Truth Social suggested its streaming network could host live news, religious programming, and family-oriented shows, films, and documentaries that “have been canceled, are at risk of cancellation, or are being removed on other platforms and services “.
“With our streaming content, we aim to provide a permanent home for high-quality news and entertainment that faces discrimination from other channels and content streaming services,” said Devin Nunes, CEO of TMTG, a former California Republican congressman, in a statement. “There is a lot of great content out there that simply fails to find an audience for unfair reasons, and we want to let these creators know that they will soon have a guaranteed platform where they won’t be canceled .”
Truth Social’s latest initiative resembles Elon Musk’s X, which claims to be the streaming platform that best defends free speech. But plot to crack down on the platform.
Trump’s association with the brand appears to be the main reason for its sky-high valuation. This has helped turn stocks into meme stocks – that is, the company trades not so much on fundamentals as on emotional responses.
Trump added billions of dollars to his net worth after TMTG merged with the blank check company in late March. But the value of its shares fell from a high of $5.2 billion to around $1.8 billion. Trump’s net worth has plummeted 300 million dollars on Tuesday following the fall of the title.
News Source : amp.cnn.com
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