Trump Media Shares Hit Record Low Despite Boost from New Polls

Donald Trump’s political standing is beginning to show a stark distinction from his financial prospects.

On Monday, shares in Trump Media and Technology Group, which operates the Truth Social platform, hit new all-time lows. This drop occurred even as recent polling indicated that Trump is gaining traction in several key battleground states across the Sunbelt.

Until recently, the stock price of TMTG was perceived as an indicator of Trump’s chances in the upcoming November elections. A poll released on Monday by The New York Times and Siena College revealed that Trump is maintaining his lead in Georgia while also edging ahead of Kamala Harris in Arizona and North Carolina. This shift follows a contentious debate earlier this month, during which Trump gained significant attention for an outrageous claim about immigrants.

The stock saw its sixth consecutive day of significant selling pressure after Trump reassured reporters about his intention to retain his nearly 115 million shares of stock.

TMTG’s shares fell by 10% during the session, finishing at $12.15, marking the lowest point since it announced plans three years ago to go public through a merger with a blank check investment vehicle, commonly known as a SPAC.

The decline means that Trump’s 59% ownership stake in the company has plummeted in value, diminishing from over $9 billion in March to just $1.4 billion today. Trump’s assertion that he will not sell his shares does not necessarily alleviate the ongoing selling pressure.

Despite being valued at $2.4 billion, the financial performance of TMTG raises eyebrows, especially considering its low annual sales projections of under $4 million. Investors are skeptical due to a lack of transparency about critical business metrics.

Current estimates for TMTG’s revenue are non-existent on platforms like Yahoo Finance, highlighting the financial community’s reluctance to engage with the stock.

If TMTG were to be valued using a price-to-sales ratio akin to the one that Reddit trades, its market cap would only amount to approximately $25 million, a fraction of its current valuation.

The SPAC deal brought in $344 million, but investors typically don’t assign a premium to that cash, further complicating the financial outlook. By the end of June, TMTG reported total assets that could potentially generate profit for shareholders amounting to just $12.5 million.

Attempts to get a comment from TMTG officials were unsuccessful, and Trump did not respond to a request made through Truth Social.

The financial uncertainty is heightened by Trump’s mounting legal fines, which are reportedly in the hundreds of millions of dollars. Trump’s limited liquid assets prompt investors to be cautious regarding his assurances about holding onto his shares.

In an interesting move, Trump recently announced plans to sell one-ounce silver coins emblazoned with his image for $100 each, a price significantly inflated compared to their current intrinsic value.

Investor Chamath Palihapitiya, known for his early investments in Facebook and his enthusiasm for promoting SPACs, described TMTG as a “directional bet on the value of his brand.” He likened the stock to a collectible, emphasizing its reliance on Trump’s name and image.

Palihapitiya remarked on a podcast that the stock resembles a trading card, where the value hinges on the former president’s well-known identity.

However, Trump’s recent declaration that he would not run for president again if he loses in November could impact his influence within the Republican Party. By potentially removing himself from future races, he might inadvertently diminish his brand’s value.