| From: Jhana | 9/19/2024 6:07:05 AM | | | | | | Good summary from the scrolling headlines above:
As Its Stock Nosedives, Truth Social Sounds Like an Absolute Wreck Behind the Scenes
Will Trump go down with the ship?
Smoke and Mirrors
We're just days away from when former president Donald Trump is legally allowed to start selling off his vast holdings of Truth Social meme stock.
The six-month lockup period, implemented by regulators to stop insider trading, could expire as soon as tomorrow, Fortune reports, giving Trump the green light to offload his 114.5 million shares of Truth Social owner Trump Media & Technology Group (TMTG).
That's an astonishing 57 percent of all of its existing stock — and according to Forbes, a huge chunk of Trump's net worth.
And while the former reality TV host vowed that he's "not selling" last week, investors are clearly wary that he's lying once again. Shares of TMTG have dropped precipitously lately, erasing all his company's stock gains since merging with a blank check company in March.
Within just the last five days, the stock has fallen well over four percent, sliding to just north of $15 per share — well below what the company was worth even pre-merger.
And, as Fortune found, TMTG is in an abysmal state, despite its absurd multibillion-dollar valuation. Revenues are declining, profits are a distant pipe dream, and multiple lawsuits are eating into its cash holdings.
With the presidential election rapidly approaching, investors are likely asking some serious questions: is any of this sustainable? After all, the company doesn't have any viable business behind it. It's a meme stock inextricably and symbolically linked to Trump's image — and he's gotta be tempted to cash out.
Meme WreckIf Trump does sell his holdings, he'd risk triggering a fire sale, tanking the company's already abysmally low share value and, meaning he'd lose out on any future sell-offs.
Trump is caught between a rock and a hard place, as Fortune points out: by not selling, he'd continue to tie his own reputation to a company that has raised billions, while only making a tiny fraction of that in revenues.
And the numbers paint a dire picture of the company's financials. In its latest quarterly earnings report, TMTG revealed that it had lost a whopping $344 million in the first half of 2024 alone. Costs grew precipitously from $9.8 million to $118.5 million over the same period.
In short, should TMTG be added to the pile of bankruptcies that Trump has left in his wake over several decades? The former president's precarious meme stock is on incredibly thin ice — and investors have seemingly seen enough of the clown show.
"The only bull case for the stock that I can think of is the greater fool theory of investing," University of Florida business professor Jay Ritter told Fortune. "You can make money by buying an overvalued stock if you can find an even greater fool who is willing to buy it from you at an even more-inflated price." |
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| To: kidl who wrote (47) | 9/19/2024 9:26:44 AM | | From: Jhana | | | | I suspect anyone heavily holding up the bid will draw scrutiny from the SEC and other agencies. If a buyer isn't covering a short, have to wonder why they would put money into a worthless shell except as a way to funnel it to others.
Should be an interesting day. |
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| To: Jhana who wrote (49) | 9/20/2024 12:18:56 PM | | From: ralfph | | | | All evidence indicates you are correct. Makes sense to blow off your position and take the money and run. Funny part is who on earth is buying the stock.
There are people out there who think that they are helping donnie by buying and people out there who think this is going to $1000.oo, both are out of touch with reality.
I keep thinking that buyers can read a chart and the buying will dry up - certainly has not happened yet. |
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| To: ralfph who wrote (50) | 9/20/2024 4:18:39 PM | | From: Jhana | | | | | Just thirteen more days to drop $1 per day then the stock will reach true value, at least temporarily. The step after that depends on when the company formally goes into BK. |
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| To: Jhana who wrote (51) | 9/20/2024 4:22:44 PM | | From: ralfph | | | | | Lots will happen before then, there will be a burp up on some sort of development. Elon prints DJT on his thread or some sort of silliness. Got to wonder who the buyers are who keep stepping in. Reminds me of Pet Rocks or the Tulip bulb frenzie way back when. |
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| To: Jhana who wrote (51) | 9/21/2024 5:08:51 PM | | From: Dan3 | | | | Re: Just thirteen more days to drop $1 per day then the stock will reach true value
Respectfully, I must disagree. That would leave the stock at 55 cents.
I did an analysis of the P/S value of the stock (ignoring for now the lack of any prospect of ever becoming profitable) and believe that a more reasonable valuation is between 5 cents and 8 cents. Message 34631460
You're overvaluing it by a factor of 10....
:-) |
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| From: Jhana | 9/23/2024 9:51:24 AM | | | | | | | Like watching a train wreck in slow motion, except everyone knew this train would derail once it reached this point in the journey. |
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