Investors in Donald Trump’s social media platform Truth Social hoped to become “very rich” after his victory, but they were wrong despite insisting otherwise, the Washington Post reports.

John Viatt, a retiree in South Carolina, knew he was taking a big risk when he poured his pension money into stock in his political idol’s social media company, Trump’s Trump Media & Technology Group.

As its share price sank in the months leading up to the election, he wrote on the company’s Truth Social platform: “This is getting depressing! I have lost $600,000. … Come on Trump!”
But Wyatt hoped a Trump election victory would send the stock into the stratosphere, posting: “By November, we’ll all be very rich!!!”

In the days after the election, however, the stock tumbled, losing nearly half of its value from last month’s peak. And on a Truth Social investor board, users who had predicted a post-presidential boom began to express their dismay. “The fact is we are in trouble,” wrote one.

As its top shareholder prepares for the White House, Trump Media faces what some financial experts call an identity crisis that has undermined its value.

Truth Social was launched after Twitter suspended his account after the US Capitol riot on January 6, 2021. Truth Social was billed as “the town square” where Trump and others could speak freely without fear of censorship. With Trump banned from platforms like Twitter and Facebook, it was one of the few places where fans of the former president could read his public statements.

But as president, Trump will likely be one of the least censored people on the planet, followed almost everywhere by cameras, microphones and crowds. Social media companies that once banned him have also lifted restrictions on his accounts, giving him a direct “path” to global attention.

Trump’s 8 million follower base on Truth Social lags far behind his 14 million followers on TikTok, 35 million on Facebook and nearly 95 million on Twitter, now called X — the latter of which belongs to Elon Musk, one of his biggest and financial backers, regularly boosts pro-Trump messages on his 200 million-follower account.

“Trump Media’s whole argument was: We’re going to allow freedom of expression in a way that hasn’t existed in years,” said Mike Stitzmoller, an economics professor at Baylor University who has studied the company. But Trump’s newfound real and online power “has taken away that competitive advantage … and that doesn’t bode well for a company that already has very little revenue.”

The Washington Post shared with Trump Media the information it intended to highlight in this report. Company spokeswoman Shannon Devine responded in a statement that the story was “ridiculously provocative.”

Trump Media sued the Post for defamation last year, saying the news organization had misreported allegations about its early funding. The case is ongoing.

Before the election, as Trump Media’s stock price went through a multi-month rollercoaster ride, many Truth Social supporters said they hoped the election would settle the volatility once and for all.

Some hinted that a win would “supercharge” (surge) the stock by pointing to a report from market data firm S3 Partners that said Trump Media’s share price “very much reflects Trump’s chances” in online prediction markets , such as betting exchanges. The morning after the election, some were excited when the stock opened up 30%.

But the stock price fell after that and has yet to recover. Its shares now sell for about $29, down from last month’s high of $51 — and well below the $66 they were trading at when Trump Media first went public in March. (The stock opened down 9 percent Tuesday morning.)

Trump Media said most of its roughly 650,000 shareholders are retail investors, and some Trump supporters said they bet on the company not just to make money but to show their faith in him.

The president-elect is the company’s majority shareholder, with about 53 percent of the shares currently worth more than $3 billion –
more than the estimated value of all his commercial properties combined according to Forbes.

Trump Media has struggled to generate a profitable revenue stream, releasing a financial statement on Election Day showing it had lost $363 million in the first nine months of the year and generated $2.6 million in revenue over the same time period, down 23 percent compared to last year.

Still, the company is valued by investors on the stock market at nearly $7 billion — more than toy giant Mattel and Alaska Airlines, two companies that generate billions of dollars in annual sales.

Trump Media is “still looking for a viable business strategy,” said Jay Ritter, an economics professor at the University of Florida.
Noting the huge gap between its revenue and market value, he added, “the only thing the company has proven to be good at is selling overvalued stock.”

A report showed that Trump Media had raised $339 million by selling more than 17 million shares in the current quarter, helping to bolster the company’s cash reserves while diluting current shareholders’ holdings. Trump Media announced that it is exploring “additional growth opportunities.”

Trump used Truth Social to announce his Cabinet nominations and said he has no intention of selling his stake in the company, saying, “I don’t need the money.” In a post-election message to Truth Social, he called for an investigation into potential “market manipulators” spreading “untrue and possibly illegal rumours” that he was interested in trading his shares.

Other senior figures at the company, however, opted to cash out some of their shares after the election, according to securities filings. Trump Media CFO Philip Juhan sold nearly 400,000 shares as part of a trading plan approved in August. Company director Eric Swinder sold all 136,000 of his shares, although his consultancy, Renatus, still holds a small stake. General Counsel Scott Glabe sold 15,000 shares.

Despite the added attention due to the campaign, Truth Social saw little growth in the weeks leading up to the election. Its website had 10 million hits last month, down 20 percent from September, according to estimates by web analytics firm Similarweb. X had 4.6 billion hits.

Trump Media, which has disputed Similarweb’s estimates in the past, would not share the kinds of performance metrics shared by social media companies, such as the number of signups or active users, saying those numbers could detract from the focus. of “long-term innovation”.

Trump has made no announcement about leaving the company when he takes control of the White House, and his continued involvement has raised concerns about a conflict of interest. But on Truth Social, some users expressed optimism about the “elevating effect” Trump’s power could have on the stock.

In the days the stock price has fallen, Viatt and other investors have expressed suspicions that the company is being undermined by “mysterious underdogs.” One user who said he had invested 98 percent of his retirement funds in Trump Media claimed without evidence that the stock price had fallen because of “Deep State scammers” and “fake stocks.”

Wyatt, the South Carolina retiree, often predicted on Truth Social that the stock would soar. “I think I might buy a cruise ship when this is all over,” she posted in April.

The volatility after the election complicated his hopes for a quick turnaround. But some Truth Social users said they were renewing their faith in the stock and urged each other, as one poster wrote, to “get every god-fearing Patriot on board by getting some DJT stock.”

A few days after the election, as the stock price fell, Viatt reposted – or, in Truth Social terms… “ReTruthed” – a message from yet another member of the platform’s investor team.

“This is the moment in history where criminals panic trying to scare you,” he said. “This is the moment in history where you put more weight and buy even more (shares of) DJT.”