The stock of Trump Media & Technology Group (TMTG) is finally showing signs of improvement after a tumultuous week, rebounding by 20% in early afternoon trading on Wednesday. Shares closed more than 14% higher on Tuesday after the company’s premier product, Truth Social, announced a major expansion into streaming. However, the stock fell 18% on Monday after the company sold millions of extra shares.
Despite its connection to former President Donald Trump and his politically polarizing nature, TMTG has managed to attract investors due to its high valuation and potential for growth. However, the company’s financial struggles and lack of fundamentals have raised concerns among investors and traders alike. In 2023, the company lost $58 million and made only $4.1 million in revenue, leading to extreme swings in the net worth of former President Trump.
Trump Media’s market value is currently just under $3.8 billion, well below its peak of $8 billion when it began trading at nearly $70 a share. Despite his name recognition and close association with the company, former President Trump serves as the largest shareholder and chairman but also faces a criminal trial on 34 felony counts of falsifying business records for his alleged role in a hush money scheme before the 2016 election.
Investors should be cautious about investing in TMTG due to its volatile performance and lack of fundamental backing for its high valuation. While there may be potential for growth in streaming services like Truth Social, the company must address its financial challenges if it hopes to achieve sustained success in this competitive industry.