Trump Media, the company behind the Truth Social app linked to former President Donald Trump, faced a significant drop in its stock prices after scathing comments from Barry Diller, Chairman of IAC and Expedia. Diller’s criticism labeled Trump Media as “a scam” and its investors as “dopes,” causing a more than 10% decline in the company’s shares on Monday. This decline highlights concerns about Trump Media’s value and the sustainability of its business model.
AFP
Trump Media’s stock had a turbulent week, with shares plummeting over 10% early on Monday, following a 12% drop the previous Friday. The company’s stock price had surged to nearly $80 two weeks ago, driven by initial optimism about its public listing. However, doubts about the company’s revenue potential and growth sustainability have clouded its valuation.
Barry Diller’s harsh critique of Trump Media worsened investor worries. Diller described the company as ”a scam” and belittled its investors as “dopes,” pointing out its lack of revenue as a major flaw. Diller’s comments highlight doubts about Trump Media’s business model and raise concerns about its future in a competitive social media landscape.
In response to Diller’s criticism, a Trump Media spokesperson defended the company, attributing the backlash to political bias. The spokesperson emphasized Truth Social’s dedication to free speech and refusal to stifle political expression, despite facing criticism. Former President Donald Trump, the majority shareholder of Trump Media, has not publicly addressed Diller’s comments or the company’s recent stock performance.
The drop in Trump Media’s stock prices has impacted former President Trump’s net worth. His stake in the company, valued at around $5.2 billion at its peak, has decreased to approximately $2.9 billion. This significant decline highlights the volatile nature of investments in media ventures, especially those linked to prominent figures like Trump.
Despite an initial stock surge, Trump Media’s valuation has come under scrutiny from analysts and investors. The company’s limited revenue and focus on the Truth Social app, which lags behind major social media platforms in user base, raise doubts about its ability to deliver consistent returns. Some experts warn that Wall Street may have overestimated Trump Media, given its modest financial performance and uncertain growth prospects.
The recent stock turbulence at Trump Media mirrors broader market volatility and uncertainty surrounding media ventures. While the company’s shares and its associated blank check company have more than doubled in value this year, the sharp fluctuations highlight the speculative nature of investments in emerging technologies and social media platforms. Investors are closely watching developments in the sector, mindful of the risks and rewards associated with high-profile ventures like Trump Media.
Donald Trump
Social Media
Nasdaq Stock Market
2024-04-10 11:51:02
Source from www.ibtimes.com