Truth Social Stock Is Crashing Even Though Trump Won

What now?

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Shares of president-elect Donald Trump's social media meme stock are plummeting — despite the controversial 78-year-old's decisive election victory this week.

The value of Truth Social owner Trump Media & Technology Group shares plunged on Thursday, dropping an astonishing 22 percent and wiping out any gains incurred in the week leading up to the election.

That's after spiking 35 percent when trading began on Wednesday, a direct response to Trump being reelected as president.

While having no sound business to justify its multi-billion dollar valuation, TMTG has long been seen as a proxy for Trump's chances of winning the election.

But now that he's won the election, there's a chance that investors have seen enough.

Stock Characters

TMTG has already been through a turbulent year, with shares hitting record highs following its merger with a blank check acquisition company in March.

After a precipitous decline, late last month the stock rallied, likely responding to renewed optimism about Trump's chances of returning to the Oval Office, but quickly came crashing back down by the end of the month in what turned out to be its biggest one-day loss since going public.

Despite its latest slide, the company is still worth a staggering $6.3 billion, putting it within spitting distance of estimates of the valuation of Twitter-formerly-X, which is owned by Trump's right-hand man Elon Musk.

Has Trump's return to the competing platform spooked his own investors? What's far more likely is that TMTG's valuation has little if anything to do with the future success of Truth Social, a platform that has struggled greatly to attract new users or achieve meaningful revenue in its current form.

Now that Trump has secured his spot in the White House, it remains to be seen where the project will go next. Will investors be willing to continue to prop up his meme stock — or will they look at other ways to line the pockets of the president?

It's a bizarre inflection point, and it's bound to presage further extreme fluctuations. In other words, the rollercoaster ride is far from over.

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