Financial markets/economy

Trump on the stock market: a semi-disaster

Posted by MoneyController on 02.04.2024

Donald Trump's recent IPO seemed to have been a great success. However, yesterday the company's shares suffered a sharp downward correction.

Shares in Trump Media & Technology Group lost around a fifth of their value

The stock market debut of Trump Media & Technology Group, the company controlled by former President Donald Trump and some of his family members, had been positive, with shares rising 16% in the first session and reaching $58 per share in the last few days. However, yesterday, Monday 1st April, the share suffered a serious setback on the stock market, losing around 21%: that is to say, it lost 13 dollars per share, and today it is worth 48.66 dollars.

Truth Social: profits and losses

Behind these results are precise figures relating to the company's activities. In 2023, the company had revenues of $4 million and losses of $58 million. Trump Media & Technology Group is best known as the company that controls Truth Social, the social network created by Donald Trump. But what are the prospects for this social network?

Doubts about the future of Truth Social's business

Reuters (in an article by Yuvraj Malik and Priyanka G) reports the opinion of some experts. Ross Benes, an analyst at Insider Intelligence, says that it is not yet clear how Truth Social can begin to generate stable profits. Michael Ashley Schulman, an analyst at Running Point Capital, points out that despite the hype surrounding its IPO, Truth Social is still a long way from competing with major social networks such as Facebook, Instagram, TikTok or X.

Investors in the company or supporters of Donald Trump?

Julie Hyman of yahoo!finance believes that the results achieved so far by the Trump Media & Technology Group, and Truth Social in particular, cannot be attributed to economic activity per se: those who are investing in Trump's group, Hyman explains, are probably doing so mainly to support the former president in his election campaign against Joe Biden; or they are financing Trump because of his popularity and recognisability: it is perhaps, as Hyman goes on to explain, a kind of "meme stock".

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