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Truth Social Hurts
Former president Donald Trump's net worth slid by an astonishing $1.3 billion on Wednesday after his meme stock had its worst day ever.
Shares of Truth Social owner Trump Media & Technology Group slid by a record 22.3 percent on Wednesday, as CNN reports — its biggest one-day loss since going public in March — and kept falling more than another ten percent on Thursday.
That's after surging over several days, a bizarre trend considering the company is bleeding millions of dollars and its flagship product has atrophied following Trump's return to X-formerly-Twitter.
Even after its abysmal day this week, Trump's majority stake in the company is still worth a baffling $4.6 billion, a figure that appears to mainly reflect his followers' willingness to invest their hard-earned cash in the stock — rather than in the fundamentals of an actually viable business.
Litmus Test
It's hazy what caused the latest plunge. Some analysts have suggested that TMTG's share price is a proxy for predictions of how next week's presidential election will turn out.
Others have blamed a loss of momentum, according to CNN, following a rally that lasted just over a month and saw the company's share price quadruple in value from a recent nadir.
As of Tuesday, before its record-breaking slide, Trump Media was worth an incomprehensible $10.3 billion, potentially more than the latest estimates of the valuation of X. That's despite the latter having around 100 times the number of monthly active users than Truth Social.
The company has also been embroiled in several lawsuits, and is dealing with a CEO who has barely bothered to show up at Truth Social's headquarters in Florida, leaving staff "in the dark about the company's vision, strategy, and future," according to a "whistleblower" letter recently obtained by the New York Times.
In short, Trump's social networking ploy has been on a serious rollercoaster ride, netting its executives millions in payouts despite the company having little to justify its lofty valuation.
"Fundamentally the valuation is a head scratcher but we have seen other meme stock narratives like AMC and GameStop on similar paths the last few years," Wedbush Securities senior equity analyst Dan Ives told CNN.
"Truth Social is a fraction of X and other social media platforms in terms of users but with an election a week away this stock has become a litmus test for some investors on the White House race," he added.
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