Trump loses $2.4 billion in net worth after his social media stock plummets just before election

() – Former US President Donald Trump’s social media shares are plummeting just before the election, significantly reducing his net worth.

After an absurd surge over the past five weeks based entirely on Trump’s perceived re-election prospects — and which had nothing to do with the company’s actual business — Trump’s social media stock has plummeted. They have now lost around 41% of their value in just three days.

The stock price of Trump Media & Technology Group, which owns Truth Social, plunged another 14% on Friday after falling 12% on Thursday and 22% on Wednesday, Trump Media’s worst one-day loss since It went public in March.

After Tuesday’s close, shares were valued at $51, valuing Trump’s dominant stake in the company at about $5.9 billion. This Friday, the value of Trump’s shares fell to $3.5 billion. That means Trump lost $2.4 billion in net worth since Tuesday.

Shares of Trump Media, which trade under the symbol “DJT,” have become an indicator of how traders think the presidential election will play out. Prediction markets in recent days have moved toward projecting that Vice President Kamala Harris will win the election, even as polls clearly show a close election with no clear favorite.

“Meme stocks, of which DJT is one, are very susceptible to momentum swings,” said Steve Sosnick, chief strategist at Interactive Brokers, who noted a clear “change in vibe” in prediction markets in recent days. “Last week’s rise in prediction markets was a benefit for DJT; On the contrary, a change of direction would harm the stock.”

The company’s fundamentals have nothing to do with why the stock is traded. Trump Media did not release any major news stories explaining the nosedive.

“Remember, that stock is basically a binary, leveraged electoral bet,” Sosnick said. “If it wins, then there is a case to increase its value. If it loses, it goes back to being a barely profitable company with little income.”

Trump Media stock has been extraordinarily volatile all year. However, between September 23 and Tuesday’s close, Trump Media had quadrupled in value.

The huge gains raised Trump Media’s value to $10.3 billion as of Tuesday’s close. That means it was briefly worth more than the implied value of X, the social network owned by Elon Musk formerly known as Twitter.

That’s despite the fact that X has about 70 million monthly active users in the US on iOS and Android, according to Similarweb data shared with . That’s about 100 times Truth Social’s 698,000 monthly active users in the US.

Even Threads, Meta’s relatively new X competitor, has about 20 times the user base of Truth Social, according to Similarweb.

Trump Media’s fundamentals remain very modest for a company that is still valued at around $6 billion. To put it in context, Paramount Global, owner of CBS, a company that Trump Media recently surpassed in market value, has generated more than $14 billion in revenue so far this year.

However, Trump Media has generated only $1.6 million in revenue this year.

George Kailas, CEO of Prospero.ai, a research platform that helps traders gather market intelligence, told on Friday that he is not surprised by the sudden shift in momentum for Trump Media because that is what happens with meme actions.

“It’s like a game of musical chairs. Everyone is happy when the music is playing and the action is going up,” Kailas said. “But because it’s not based on any kind of good tangible value, the moment that stops, everyone panics… and the bottom falls out.”