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Donald Trump's Net Worth Takes Hit as Truth Social Shares Dive

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Republican presidential nominee, former President Donald Trump speaks during a campaign rally at Kinston Regional Jetport on November 03, 2024 in Kinston, North Carolina. Chip Somodevilla/Getty Images

Former President Donald Trump experienced a significant decline in his net worth this week after his social media company's stock, Trump Media & Technology Group, plummeted dramatically.

Trump's net worth dropped by $1.3 billion due to a staggering 22.3 percent decrease in the share price of Truth Social, marking the worst loss since the company went public in March.

Trump's Net Worth Dips as Truth Social Faces Steep Stock Drop

The shares closed at over $51, giving Trump's stake a valuation of about $5.9 billion. However, by the end of the trading day on Wednesday, that figure had dropped to $4.6 billion, according to The Independent.

The sudden fall has left many analysts puzzled, as there were no significant announcements from Trump Media to explain the sharp decline. Many believe the stock price has become a reflection of traders' perceptions about the upcoming presidential election, which adds to its volatility.

The trading patterns of Truth Social have been unpredictable, and analysts suggest that this recent drop is linked to a broader trend in "meme stocks."

Steve Sosnick, chief strategist at Interactive Brokers, explained, "Meme stocks, of which DJT is one, are very susceptible to momentum shifts."

He noted that recent changes in prediction markets, which seemed to favor Vice President Kamala Harris, likely contributed to the stock's decline, CNN reported.

From September 23 to the previous Tuesday, Truth Social's shares had surged, quadrupling in value due to optimistic projections regarding Trump's potential reelection. At one point, Trump Media's value soared to $10.3 billion, even surpassing that of major companies like Paramount Global, which owns CBS. In contrast, Trump Media's actual revenue this year has only reached about $1.6 million.

Trump Media Shares Plummet as Investors Respond to Market Volatility

In the days following the stock's peak, the share price continued to tumble, losing 41 percent of its value in just three days. Following the closure on Tuesday, the stock took another hit, dropping 14 percent by Friday. This plunge further decreased the value of Trump's shares to approximately $3.5 billion, indicating a staggering loss of $2.4 billion in just a few days.

Trump Media's stock fluctuations illustrate the unpredictable nature of market investments that lack strong business fundamentals. George Kailas, CEO of Prospero.ai, likened the situation to "a game of musical chairs," where investors become anxious and sell off shares the moment the momentum shifts.

With Truth Social's user base significantly smaller than its competitors, including X, formerly known as Twitter, and Threads, the company faces challenges in proving its long-term viability. X boasts around 70 million active users, while Truth Social has only about 698,000.

As the presidential election approaches, the fate of Trump Media and its stock remains uncertain, reflecting the high stakes associated with Trump's political future.

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