Scott Olson/Getty Images
In this photo illustration, Republican presidential candidate former President Donald Trump's social media site Truth Social is shown on a cellphone in Chicago, Illinois on March 25, 2024.
New York
CNN
—
Investors are flocking to shares of Trump Media & Technology Group.
Shares of TMTG (DJT) fell 14% on Tuesday Down 18% on Monday. Shorting stocks on Tuesday: The company's flagship product, Truth Social, Announced a major expansion into streamingA notoriously costly business with media behemoths like Disney He struggled to make a profit.
Shares of TMTG, majority-owned by former President Donald Trump, have fallen more than 70% from their all-time highs set on March 26, the day after the company merged with a blank check acquisition to go 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 Care must be taken if they choose to trade the stock, as the company lacks the fundamentals to back up its sky-high valuation.
Trump Media $58 million lost A mere $4.1 million was generated in 2023. So it announced on Monday that it would sell another 21.5 million shares to the public — even though it would dilute the value of existing shareholders.
Check out this interactive content on CNN.com
The streaming initiative has given investors no reason to get excited about the company. Truth Social 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 power streaming apps for phones and tablets — and eventually smart TVs.
Truth Social recommended that its streaming network offer live news, religious and family-friendly programs, movies and documentaries that have been “cancelled, are at risk of cancellation, or will be suppressed on other platforms and services.”
“Through our streaming content, we aim to provide a permanent home for high-quality news and entertainment that faces discrimination from other channels and content delivery services,” TMTG CEO Devin Nunes, a former Republican congressman from California, said in a statement. “There's a lot of great content out there that can't find an audience for illogical reasons, and we want to convey that these creators will 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 to be a streaming platform that protects free speech. But X has hundreds of millions of active users — hundreds of times Truth Social's audience — and has struggled to attract advertisers even after Musk reshaped the business, allowing hate speech and conspiracy theories to run rampant on the platform.
Trump's association with the brand appears to be the primary reason for its high rating. This helped turn the stock into a Memory share — That is, the company doesn't trade on its fundamentals, it trades on emotional responses.
Trump added billions of dollars to his net worth after he merged with blank check company TMTG 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 fell by approx $300 million on Tuesday from the stock's decline.
