Donald Trump's social media company, trading under the DJT ticker, experienced a significant drop of over 20% in shares on Monday, just days after its public debut. Trump Media & Technology Group's report of nearly $60 million loss in 2023, coupled with minimal revenue, contributed to this downturn, causing the former president's net worth to decrease by $1 billion. Despite an initial surge last week, valuing the company at $11 billion, experts cautioned about the inevitable decline as Truth Social, its main product, faces user decline and financial challenges.

This fluctuation in stock prices evoked parallels with the meme stock frenzy of the pandemic era, where companies like GameStop and AMC saw soaring share prices despite weak fundamentals. Monday's trading saw Trump Media shares plummet to $48.66, though they remain significantly higher year-to-date, largely driven by support from small-time investors aligning with the former president.

Trump, holding nearly 60% ownership, stands to gain billions upon selling his shares, yet the company foresees continued losses and negative cash flows, as per its SEC filing on Monday.

Financial filings reveal that Trump Media incurred approximately $40 million in interest expenses and $16 million in operating losses in 2023, casting doubt on its ability to meet financial obligations.

Despite this, the company expressed uncertainty regarding its liquidity to cover liabilities.

Launched in February 2022, Truth Social emerged as an alternative platform for Donald Trump following his bans from Twitter (now X) and Facebook post the Capitol riot.

Despite Trump's consistent usage of the platform for social media posts, it has failed to attract a significant user base.

Similarweb estimates suggest only about five million active monthly users, significantly fewer than its competitors. Although Truth Social boasts around 8.9 million sign-ups, it refrains from disclosing key performance metrics, leaving shareholders in the dark about its operational efficiency.