Trump Media shares plunge to record lows despite new polls boosting ex-president's campaign

Shares of the former president's social media group hit new historic lows on Monday, even as the latest polls suggest he is catching up in some key swing states in the country's Sunbelt.

Until recently, the stock price of its parent company Truth Social was widely seen as a barometer of its prospects in November.

On Monday, a survey by The New York Times and at Siena College, he maintained his lead in Georgia while overtaking Harris in Arizona and North Carolina after this month's heated debate in which Trump caused a stir by claiming that immigrants eat pets.

It was also the sixth consecutive day of heavy selling at Trump Media and Technology Group (TMTG), the parent company of Twitter clone Truth Social, after a very brief respite when Trump told reporters he had no intention of selling his nearly 115 million shares.

The price closed the session down 10% and closed at USD 12.15, its lowest Level since the first announcement three years ago, via a reverse merger with a blank check investment vehicle known as SPAC.

This means that the value of Trump’s 59% stake in the company, The company, which until this week was subject to a six-month lock-up period following the SPAC merger, has been The peak was over $9 billion in March.

Assuming Trump does not sell his stake as he has claimed, the selling pressure will not necessarily subside.

Hey everyone! I have something incredible to share today as we announce the launch of our official Trump coins! The ONLY OFFICIAL coin designed by me and proudly minted here in the USA. The first issue silver medallion of President Donald J. Trump will be available… pic.twitter.com/9SP1PaLOTh

– Donald J. Trump (@realDonaldTrump) 21 September 2024

Billion dollar valuation, million dollar turnover

Due to its meme image and refusal to reveal anything about the underlying metrics that drive its business, the stock is avoided by financial analysts.

Yahoo Finance does not have a single estimate for this year's revenue, let alone profits or, in the case of TMTG, losses.

Applying the same price-to-sales ratio of 7.5 that Reddit currently uses for TMTG stock to next year's sales would give a market capitalization of around $25 million.

That is a fraction of the $2.4 billion that TMTG, on its way to annual sales of well under $4 million (with an “m”), is currently worth.

Excluding the $344 million raised from the SPAC deal – cash that investors typically don't value many times over – the total assets on the company's books that can potentially generate profits for shareholders were just $12.5 million at the end of June.

Assets could not reach TMTG representatives for comment. When contacted TMTG's Truth Social reported that Trump did not respond to a request for comment.

“Targeted bet on the value of its brand”

Given Trump's need for cash to pay hundreds of millions of dollars in legal penalties and the lack of unencumbered assets he could easily liquidate, investors seem unwilling to take the former White House occupant's words at face value.

Last week, he announced his latest trading plan: He will sell 1-ounce silver coins with his face on them for $100 a piece – more than three times their current intrinsic value.

Chamath Palihapitiya, an early Facebook investor best known for promoting SPACs during the pandemic-era boom, ironically predicted that TMTG would be “a targeted bet on the value of his brand” and something similar to the just-unveiled official Trump coin.

In an interview with the All-In podcast shortly after TMTG began trading in March, he said the stock was “effectively a trading coin, a baseball card if you will – a trading card via stock” based on the name recognition and likeness to the former president.

Trump may have inadvertently damaged his own investment story when he said on Sunday that he would not run for president again if he lost in November. By removing him from future races, he may lose his influence in shaping the Republican Party.