Less than a week ago, on April 2, I wrote about Trump Media & Technology Group’s disastrous 8-K filing with the Securities and Exchange Commission, which literally said the company that owns Truth Social couldn’t pay its bills. At the time, the company was worth $8.84 billion, with Donald Trump’s share valued at a whopping $5 billion.
But as I wrote then, Trump would never see that kind of money, and the week since hasn't disappointed.
As I write this, TMTG—whose stock ticker is Trump’s initials, DJT—is down nearly 11% today, and down more than 23% in the past five days. The company’s market cap is now just under $5 billion, bringing Trump’s share to $2.8 billion, almost halved from its peak.
And to be very very clear, TMTG is worth nowhere near $5 billion. So how much might it actually be worth?
It’s not just that the company is unprofitable; many public (and private) companies are. It also generates almost no revenue, with just $3.252 million generated last year. The most generous possible valuation method would be the 10x multiple on revenues granted to fast-growing technology stocks. TMTG isn’t one of those, but even if it was, it would only be worth $32 million.
The average stock on the Nasdaq exchange trades at around five times its revenue, which would value the company at $16 million. Given that the company has floated 136.7 million shares, that would price each share at 12 cents. At a current price of $36 per share, there is plenty of room for further collapse.
Wall Street so desperately wants to “short” the stock—the (dubious) mechanism by which investors profit if a stock loses value—that the cost of borrowing shares to short is sky high. It doesn’t seem like anyone believes in this turd.
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