Former President Donald Trump's eponymous media company's plummeting stock prices erased all the year's gain as its investors worry the financially strapped candidate and convicted felon might soon cash out his shares, according to a new financial analysis.
Standard and Poor's 500 — an index tracking 500 of the largest publicly traded companies — rose 16 percent over a six-month stretch that saw Trump Media shares tumble from a $79.38 high on March 26 to just $17 Wednesday, when stock dropped 6 percent, Fortune reported.
"Trump’s financial situation appears strained," the Fortune analysis stated. "Trump is nearing the day he can cash out of Truth Social’s parent company, raising concerns of a potential sell-off that could hit the meme stock hard."
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Trump’s 59 percent stake in the company is valued at $1.95 billion, but he cannot sell his 115 million shares until six months after his agreement with Digital World Acquisition Company (DWAC) on March 25, Fortune reported.
That end date is raising concerns about the future of Trump Media, which had lost 80 percent of its value as of Wednesday, as Trump faces a tightening race against Vice President Kamala Harris, mounting legal fees, according to the analysis.
"Investors are growing anxious," Fortune reports. "The loss-making social media company is trading at over 1,000 times its annual revenue. Sales for the first half of the year were just $1.6 million, with deeply negative cash flow."
The analysis warns Trump Media stock could continue to decline after CEO Devin Nunes and CFO Philip Juhan sold off $2.5 million worth of shares.
Trump Media attracts little interest from professional investors and Wall Street analysts who avoid "meme stock" companies that don't publish key metrics, the Fortune report stated.
The increasingly close election season has spelled trouble for Truth Social, Trump's social media platform and the company's primary asset, according to the Fortune analysis.
"Trump has now been forced to return to Twitter (now X), where he has ten times as many followers and a far larger audience, in order to reach potential voters," the report stated.
"Should he lose in November...Truth Social’s importance going forward would be greatly diminished since Trump’s political career would likely be over."
