Nov 7, 2024 - Business
Truth Social shares sink after the election
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Truth Social's parent company saw its stock fall 23% on Thursday, wiping out all of its post-election gains and around $1.8 billion in market value.
Why it matters: The decline and its timing raise fresh questions about the meme stock's future.
- Trump Media & Technology Group had appeared to be a binary bet on Donald Trump regaining the presidency, and that seemed to play out when shares opened up 31% on Wednesday.
- But since then it's been all downhill, perhaps because some investors saw quarterly earnings that were released on election day (a $19 million loss on $1 million in revenue). Or maybe it's a case of "buy the rumor, sell the news."
- Broader stock market indices, meanwhile, climbed over the same period.
Zoom in: TMTG has plenty of cash to survive ongoing losses, but would be a penny stock if were it trading as a multiple of its meager revenue.
- Trump is believed to still hold around a 53% stake, now valued at $3.18 billion.
The bottom line: Investors might be betting more on the meme volatility than what actually underlies TMTG, whether that be its financials or its namesake's job title.
