Truth Social Takes a Hit: $21% Drop in Stock Prices and Uncertain Profitability

Stock of Trump’s social media company plummets after earnings report

The stock prices of Truth Social, a social media company owned by Trump Media & Technology Group, dropped over 20 percent on Monday. This fall was due to the release of the company’s first earnings report as a publicly listed company, which showed losses of millions. Despite this setback, the company’s market value remains over six billion dollars. However, analysts believe that Truth Social is overvalued and lacking a clear path to profitability.

Trump Media warned about difficulties in repaying debts and ongoing operating losses and negative cash flow. This news caused the stock to plummet by 21 percent to $48.66. Although hyped, Truth Social is not yet a true competitor to larger platforms like Reddit, which has a market value of eight billion dollars. While Trump Media’s revenue increased to $4.1 million last year, Reddit’s revenue reached $800 million. Additionally, Trump Media’s turnover decreased in the fourth quarter of last year, raising concerns about its future prospects.

Despite initial hype and a high market valuation, the company’s ongoing losses and uncertain path to profitability raise doubts about its long-term viability as a major competitor in the industry. Analysts believe that Truth Social needs to find ways to increase its user base and monetization strategies if it wants to become profitable in the long run.

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