Donald Trump’s political standing appears to be diverging notably from his financial trajectory.
Shares in the social media group affiliated with the former president reached new all-time lows on Monday, despite recent polls indicating he is gaining momentum in key battleground states in the Sunbelt region.
Until recently, the share price of Truth Social’s parent company was considered a barometer of Trump’s November election prospects. On Monday, a poll by The New York Times and Siena College showed Trump maintaining his lead in Georgia and pulling ahead of Harris in Arizona and North Carolina, following their contentious debate this month, during which Trump went viral for controversial comments about immigrants.
This downturn marked the sixth straight day of heavy selling for Trump Media and Technology Group (TMTG), the parent company of Truth Social. This followed a brief period of respite after Trump publicly stated his intention not to sell his nearly 115 million shares of stock. The stock closed down by 10% at $12.15, its lowest level since announcing its plans to go public via a reverse merger with a Special Purpose Acquisition Company (SPAC) three years ago.
The value of Trump’s 59% stake in TMTG, which was subject to a six-month lockup period following the SPAC merger, has dwindled to $1.4 billion from its peak of more than $9 billion in March. Should Trump adhere to his claim of not selling his stake, the selling pressure may continue.
With its image as a meme stock and lack of transparent metrics, TMTG’s stock is often disregarded by financial analysts. There are no estimates on Yahoo Finance for the company’s revenue or earnings for this year. Applying a 7.5x price-to-sales multiple for the next year’s revenue that Reddit trades at, TMTG would have a market cap of about $25 million, a fraction of its current valuation of $2.4 billion, despite its anticipated annual sales being below $4 million.
Excluding the $344 million raised from the SPAC deal, TMTG’s total revenue-generating assets amounted to just $12.5 million as of the end of June. Fortune could not reach TMTG officials for comment, and Trump did not respond to a request for a statement via TMTG’s Truth Social.
Given Trump’s need to generate cash to meet legal fines amounting to hundreds of millions of dollars and his lack of easily liquidatable assets, investors are hesitant to take his words at face value. Last week, Trump announced a merchandising plan involving the sale of one-ounce silver coins embossed with his face for $100 each, significantly more than their intrinsic value.
Chamath Palihapitiya, an early Facebook investor known for promoting SPACs, described TMTG as a "directional bet on the value of his brand," akin to the Official Trump Coin. During an episode of the All-In podcast, he likened TMTG stock to a "trading coin" or a "baseball card," banking on Trump’s name recognition and likeness.
Trump may have inadvertently affected his investment story by stating he would not run for the presidency again if he loses in November, potentially diminishing his influence over the Republican Party.