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Trump Loses $1 Billion Of Net Worth As His Media Venture Faces A Setback

Updated: Apr 2

Donald Trump’s media venture TMTG (Trump Media & Technology Group) loses 21% of its share value on Monday after disclosing its financial statements. TMTG, the parent company that owns Truth Social, faces a plunge in stock price, leading to a loss of $1 Billion in net worth for its owner, Donald Trump.

On Monday, TMTG officially admitted that the company has gone through a major financial crisis this year, so much so that accountants flagged the company’s ability to operate viably. After the announcement, the price for TMTG stock fell from $49.90 to $48.66, almost 21%. It should be noted that the company started with $79.38 per share on March 26. However, even after a stock value crash, the company is still valued at $6.6 billion on the Nasdaq. 

When asked about the unusual valuation of a company that’s losing money, analysts compared the situation with meme stocks. This term is often used for shares that gain individual investors only because of social media buzz rather than its profitability or growth history. 

Truth Social is TMTG's primary product, and Donald Trump holds 54% of the company's shares. The organization used a shell company called Digital World Acquisition Corp to become a public company and sell shares. This particular strategy saved the company amidst its loss of $58 million last year.

Financial Analyst Matt Egan commented, “ Wall Street Often doesn’t mind propping up money-losing start-ups, so long as there’s a good amount of cash coursing through operation and existing some kind of well-articulated path of profitability. That’s not what’s happening here. TMTG generated only 4.1 million in revenue last year. That means the stock is trading at about 1500 times its annual revenue. Not even the frothiest of AI stocks come close to that level of disconnect.”

Donald Trump is currently facing major financial stress due to his ongoing trial. However, he can’t use his shares of TMTG to raise the money due to a contract called Lock-Up Provision. It prevents company executives from selling their shares for at least six months from the time a company goes public.

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