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 Wreck

If 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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