Donald Trump’s political fortunes are beginning to diverge from his financial fortunes.
Shares of the former president’s social media company fell to an all-time low on Monday, even as the latest polls suggested he gain ground In a few key states in the Sun Belt of the country.
Until recently, the price of Truth Social, the parent company he chairs, was widely seen as a barometer of his prospects in November.
On Monday, a poll published by The New York Times Siena College showed he maintains his lead in Georgia while leading Harris in Arizona and North Carolina after their contentious debate this month that saw Trump It spread widely. For claiming that immigrants eat pets.
It also marked the sixth straight day of heavy selling in shares of Trump Media and Technology Group (TMTG), the parent company of Twitter-like Truth Social, after a very brief respite when Trump told reporters he had no intention of selling his roughly 115 million shares.
The stock closed down 10% during the session, closing at $12.15, its lowest level. Since first announcing three years ago its plans to go public through a reverse merger with a blank-check investment vehicle known as Special purpose company.
This means that the value of Trump’s 59% stake in the company, Which until this week was subject to a six-month lock-up period following the SPAC merger, has fallen to just $1.4 billion from It peaked in March at over $9 billion.
Assuming Trump does not sell his stake as he claims, selling pressure will not necessarily abate either.
Hey everyone! I have something great to share with you today, as we introduce you to the launch of Official Trump Coins! The only official coin designed by me – and proudly minted right here in the USA. The First President Donald J. Trump Silver Medal will be available… pic.twitter.com/9SP1PaLOTh
— Donald J. Trump (@realDonaldTrump) September 21, 2024
$1 billion valuation, $1 million in sales
Because of its symbolic image and refusal to disclose anything about the fundamental metrics that govern its business, financial analysts avoid this stock.
there Not one estimate On Yahoo Finance regarding this year’s revenue, let alone profits or, in TMTG’s case, losses.
Applying the same 7.5x price-to-sales multiple to next year’s revenue that Reddit currently trades at to TMTG shares would give it a market cap of around $25 million.
That’s a fraction of the $2.4 billion TMTG has generated, which is on track to achieve annual sales well under $4 billion. million (with ‘m’), currently equals.
Excluding the $344 million raised from the SPAC deal — cash that investors typically don’t assign a multiple to beyond its stated value — the total amount of assets on its books that could generate dividends for shareholders was just $12.5 million at the end of 2018. End of June.
luck We were unable to reach TMTG officials for comment. When contacted, Trump did not respond to a request for a statement via TMTG’s Truth Social site.
“Directional bet on brand value”
Given Trump’s need to raise money to cover legal fines in hundreds of millions of dollars But lacking unencumbered assets that he could easily liquidate, investors appear unwilling to take the former White House resident at his word.
Last week, he announced his latest marketing plan: selling one-ounce silver coins engraved with his face for $100 each, more than three times their current intrinsic value.
Ironically, Chamath Palihapitiya, an early Facebook investor known for promoting special purpose acquisition companies (SPACs) during the pandemic boom, sarcastically predicted that TMTG was a “directional bet on his brand value” and something akin to Trump’s just-unveiled official currency.
Talking about All-In Podcast Shortly after TMTG stock began trading in March, he said the stock was “a virtual trading currency, a baseball card if you will — a trading card via stock” based on the former president’s name and likeness.
Trump may be He inadvertently damaged his investment story when he announced on Sunday that he I will never run again If he loses the presidential election in November, his exclusion from any future elections would mean he would lose his influence in shaping Republican Party.
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