new york
CNN
—
Investors in Trump Media & Technology Group stock are throwing in the towel.
TMTG (DJT) stock fell 14% on Tuesday, after closing 18% lower on Monday. Factors behind Tuesday's share price drop: The company's flagship product, Truth Social, is a major push into its streaming business, a notoriously costly business where media giants like Disney have struggled to turn a profit. announced an expansion.
Shares in TMTG, which is majority owned by former President Donald Trump, have fallen more than 70% from their all-time high on March 26, the day after the company merged with a blank check acquisition company and went public. The company is still worth billions of dollars, but it has struggled to turn a profit and is short on cash. Experts have warned investors to be cautious when trading this stock as the company does not have the fundamentals to support its soaring price.
Trump Media lost $58 million in 2023, with revenue of just $4.1 million. So the company announced Monday that it would sell an additional 21.5 million shares to the public to raise cash, even if it dilutes value for existing shareholders.
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The streaming efforts didn't give investors a reason to get excited about the company. Truth Social has spent the past six months testing live TV streaming on the web, iPhone and iPad apps, and is building a content delivery network that will launch streaming apps for phones, tablets and eventually smart TVs. He said he is thinking of starting one.
Truth Social says its streaming network hosts live news, religious programming, family programming, movies and documentaries that have been “canceled, in danger of being canceled, or suppressed on other platforms or services.” He suggested that it might be possible.
Devin Nunes, CEO of TMTG and former California Republican congressman, said, “Streaming content permanently disrupts high-quality news and entertainment that is otherwise subject to discrimination by other channels and content distribution services.'' We aim to provide a base for the development of the world,” the statement said. “There's a lot of great content that can't find an audience for all the wrong reasons, and we want to let these creators know that they'll soon have a guaranteed platform that won't get cancelled.”
Truth Social's latest effort sounds similar to Elon Musk's X, which claims to be the streaming platform that best defends free speech. But X has hundreds of millions of active users (hundreds of times more than Truth Social's audience), and after Mr. Musk restructured the business, hate speech and conspiracy theories became rampant on the platform. is also struggling to attract advertisers.
Trump's association with the brand appears to be the main reason for its soaring valuation. This helped turn the stock into a meme stock. This means that the company does not trade based on fundamentals, but based on emotional reactions.
Trump added billions to his net worth after TMTG merged with a blank check company in late March. But the value of his stock has fallen from a peak of $5.2 billion to about $1.8 billion.Trump's net worth has decreased significantly 300 million dollars after the stock price plunged on Tuesday.
