new york
CNN
—
Former President Donald Trump’s social media companies fell into a deep slump and things continued to get worse, wiping out much of Trump’s net worth.
Shares of Trump Media & Technology Group (DJT) fell last week to their lowest level since the merger that took the owner of Truth Social public this spring.
Despite rebounding 7% on Monday, Trump Media has lost nearly three-quarters (72%) of its value since hitting a peak of $66.22 on March 27.
The sell-off caused huge losses for investors, including Trump.
The value of Trump’s 114.75 million shares of major stocks was $6.2 billion as of May 9. It has now fallen to about $2.1 billion, a sharp drop that has caused him to fall off the Bloomberg Billionaires Index, which lists the world’s 500 richest people.
The blow reinforces concerns from experts who have repeatedly warned that Trump Media’s multibillion-dollar price tag doesn’t make sense: The company is unprofitable, has little revenue and Truth Social remains a relatively small player in the social-media world.
“If it weren’t for Trump, this stock would be trading at $1,” Matthew Tuttle, CEO of Tuttle Capital Management, told CNN in a phone interview.
In April, billionaire Barry Diller told CNBC that anyone buying Trump Media shares was a “fool.” In June, LinkedIn co-founder Reid Hoffman told CNN that Trump Media’s value was “well outside the normal range.” Both Diller and Hoffman are megadonors to the Democratic Party.
Beyond Trump Media’s weak fundamentals, analysts say there are likely other factors behind the company’s share price decline.
Tuttle argues that a big catalyst is the fact that Vice President Kamala Harris is neck and neck with President Trump in some polls.
Indeed, Trump Media’s market capitalization has roughly halved since President Joe Biden withdrew from the race and endorsed Harris on July 21.
“This stock is totally geared towards a Trump win,” Tuttle said. “If Trump wins, maybe this company can survive. But if he loses, I don’t see how this company can survive.”
Trump Media did not respond to CNN’s request for comment.
Of course, Trump Media still has more than $300 million in cash and cash equivalents with which to fund acquisitions and other ventures.
Trump Media, which made just $837,000 in revenue last quarter, is building a streaming business targeted at conservatives. In August, it launched Truth+, a TV streaming platform on iOS, Android and a web version of Truth Social.
Another dark cloud hanging over Trump Media is the looming expiration of a lockup period that has barred Trump and other insiders from selling their shares.
Those restrictions are set to be lifted as early as Sept. 20, according to the filing, freeing up insiders to sell shares if they wish.
But experts say it would be extremely difficult for Trump, the company’s largest shareholder, to sell all or even a large part of his stake without causing the stock price to plummet.
The stock market fortunes of Trump Media could change, particularly with Tuesday’s highly-anticipated debate between the former president and Harris.
Still, Tuttle warned individual investors, even Trump supporters, to approach the stock with caution and pay close attention to the fundamentals.
“I’m a big believer in keeping politics and profit separate,” he said. “If you’re hanging on to this for dear life because you’re a Trump supporter, you’re foolish. You’re investing to make money.”