What Investors Might Have Noticed About Trump’s Truth Social, Forcing it to Quickly Act

by Jessica

The financial woes of the Trump Media & Technology Group revealed through its $58 million loss juxtaposed with a mere $4 million in revenue, have sent shockwaves through the investment world.

Despite these dismal figures, as shown in new financial data the firm released on Monday, April 1, the company’s stock price experienced a recent surge, boosting its market capitalization to a staggering $7 billion.

Some observers, like progressive journalist Judd Legum, attribute this surge to fervent Trump supporters investing as a show of political allegiance.

However, Legum, also a commentator warns of impending regret, labeling the company as a “money incinerator.”

Journalist Bill Grueskin echoed the sentiment, emphasizing the stark disparity between the company’s financial performance and its inflated market valuation.

“This isn’t an April 1 joke,” Grueskin declared, highlighting the gravity of the situation.

Meanwhile, Washington Post tech reporter Drew Harwell analyzed Truth Social’s financials, emphasizing their incongruity with its exorbitant market debut.

“Truth Social’s underlying financials are way out of sync with the frenzied stock-market debut that just valued it at $8 billion. The company’s shares are crashing on the news,” he said.

Options trader Nick Yoder, who previously noted the surge in short-selling interest for Truth Social shares, sees the newly disclosed financial data as validation of investor suspicions regarding the company’s overvalued stock, hence it’s decision to act.

Yoder points out the stark disparity between Truth Social’s market capitalization and its meager revenue, painting a grim picture of its financial health.

“Why is there an unprecedented level of interest in shorting DJT (Truth Social stock)?” he asked.

“One apparent reason: This ‘$13 Billion’ company has less revenue than the small lumber yard next to my parent’s house. Currently trading at a Market Cap / Revenue ratio of around 1,500x (many companies have a multiple of 1x).”

NPR media analyst Eric Deggens took a broader stance, viewing Truth Social’s inflated stock price as symptomatic of deeper issues within the American capitalist system.

He underscored the disconnection between stock market valuation and actual business performance, suggesting a fundamental flaw in the system.

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