Achi news desk-
New York
CNN
–
Investors in Trump Media & Technology Group stock are throwing in the towel.
Shares of TMTG (DJT) fell 14% on Tuesday after closing 18% lower on Monday. Driving the stock lower Tuesday: The company’s flagship product, Truth Social, announced a major expansion into streaming, a notoriously cost-intensive business where media giants like Disney have struggled to turn a profit.
TMTG stock, which is majority owned by former President Donald Trump, is down more than 70% from an all-time high it set on March 26, the day after it merged with a blank check acquisition firm to become public. Although the company is still worth billions of dollars, it is struggling to make money and is desperate for cash. Experts have warned investors to be careful if they choose to trade the stock, because the company lacks the fundamentals to support its sky-high valuation.
Trump Media lost $58 million in 2023 and made only $4.1 million in revenue. So it announced on Monday that it would sell 21.5 million more shares to the public to raise cash – although that would dilute the value for existing shareholders.
Home for ‘restricted’ content
The streaming venture gave investors no reason to be enthusiastic 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 stand streaming apps for phones and tablets – and in the the ultimate in smart TVs.
Truth Social suggested that its streaming network could host live news, religious programming and family-friendly shows, movies and documentaries that “have been canceled, are at risk of cancellation, or are being suspended on platforms and services others.”
“With our streaming content, our goal is to provide a permanent home for high-quality news and entertainment that faces discrimination from other channels and content delivery services,” said TMTG CEO Devin Nunes, a former Republican congressman for California in a statement. “There’s a lot of great content that can’t find an audience for unjust reasons, and we want to let these creators know that they’ll soon have a guaranteed platform where they won’t be canceled.”
Truth Social’s latest push sounds a lot like Elon Musk’s X, which claims it’s the streaming platform that best protects free speech. But X has hundreds of millions of active users – hundreds of times Truth Social’s audience – and has still struggled to attract advertisers after Musk reshaped the business, allowing hate speech and conspiracy theories to run rampant the platform.
Trump’s association with the brand appears to be the main reason for its sky-high valuation. That helped turn shares into a meme stock — that is, the company doesn’t trade on its fundamentals so much as it trades on emotional responses.
Trump added billions of dollars to his net worth after merging TMTG with the blank check company in late March. But the value of its shares has plunged from a high of $5.2 billion to about $1.8 billion. Trump’s net worth fell roughly $300 million on Tuesday from the stock plunge.
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