Trump Media stock is plummeting. These shareholders don’t care

(NEW YORK) — Trump Media & Technology Group’s stock dropped more than 11% this week, suffering from sour sentiment after a weak earnings report and the return of former President Donald Trump to rival social media platform X.

The company’s woes stretch back to the middle of last month. Since then, the stock for the Truth Social parent company has plummeted by about 43%. Yet as the stock continues to slide, some of its investors remain unfazed, telling ABC News they are optimistic about the company’s financial outlook, or intend to stand by it as an expression of their support for Trump.

Todd Schlanger, an interior designer from West Palm Beach, told ABC News that he purchased shares in Trump Media because he supports Trump’s politics and believes in his businesses.

“I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech,” said Schlanger, who said he owns approximately a thousand shares of the company.

A frequent user of the social media platform, Schlanger boasted about the user interface – “It’s like a combination of X and Facebook” – and said he looked forward to the expansion of the company’s streaming services.

“I think it’s going to be as strong as Facebook or Twitter,” said Schlanger.

Other investors said they primarily saw Truth Social as a way to support the former president.

“I did it more as a statement to President Trump and to show support at the time. I wasn’t really looking to make a lot of money,” said Teri Lynn Roberson, who bought five shares of the company as the company neared its peak stock price after going public in March.

Roberson said she was unconcerned about the stock’s poor performance or the impact of Trump’s potential return to rival X, the latter of which she said could benefit Trump’s presidential campaign by expanding his audience of supporters beyond the “echo chamber” of Truth Social.

“I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said.

Truth Social’s stock performance holds significant financial implications for the former president, who owns a 65% stake in the company. Truth Social shares make up a large portion of Trump’s overall net worth, according to Fortune.

Truth Social did not immediately respond to ABC News’ request for comment.

Truth Social’s recent losses

An earnings report released last Friday showed, Truth Social had lost more than $16 million over a three-month period ending in June. The company brought in revenue of about $836,000, down 30% from $1.2 million a year earlier, the earnings report showed.

In a statement released following the earnings report, Truth Social CEO Devin Nunes applauded the company’s balance sheet, including $344 million in cash and no debt.

“From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing,” Nunes said.

Investors, however, reacted poorly to the quarterly report when trading opened on Monday, and the stock price continued to drop when Trump then posted on rival X for the first time in roughly a year. It marked just his second post on the platform since January 2021, when the company suspended Trump in the aftermath of the Jan. 6 attack on the Capitol “due to the risk of further incitement to violence.”

After tech billionaire Elon Musk purchased what was then known as Twitter in Oct. 2022, he lifted the ban the following month. On Monday, Musk spoke with Trump in an interview that was broadcast on the platform.

While the former president is bound by an exclusivity agreement with Trump Media & Technology Group to post personal content first to Truth Social, Trump can make “politically-related” posts on other social media sites, according to the agreement. Other than a series of political posts on Monday, Trump has refrained from using social media sites beyond Truth Social.

Michael Rogers, who owns a masonry company in Asheville, North Carolina, said he first bought shares of Truth Social in 2022, before the company went public. Since then, Rogers has acquired more than 10,000 shares, he said.

Rogers, who said he plans to vote for Trump in November, bought the shares as both an expression of political support and as a sign of confidence in the company’s financial outlook, he said. “It’s a 50-50 balance of the reasons I started investing in Truth Social,” Rogers told ABC News.

Trump’s return to X this week did not bother Rogers, since the platform allows Trump to reach a larger audience, Rogers said. The weak earnings report last Friday did concern him, however.

“The revenue just isn’t there,” Rogers said. “That’s something the company has to work on.”

Despite the stock’s recent struggles, Rogers said he retains confidence in the business.

“I’m in it for the long haul,” Rogers said.

Analyst outlook

Analysts described the performance of Truth Social as the characteristic fluctuation of a so-called “meme stock.” The term – made famous by pandemic-era examples such as GameStop and AMC – indicates a company that largely appeals to investors on the basis of ideology, rather than financial outlook.

Truth Social’s value climbed about 30% in the immediate aftermath of an assassination attempt against Trump in July, reaching a price of $40 a share. That figure marked the highest level for the stock in more than a month, but shares still stood well below a peak of about $66.

The share price now stands at about $23, amounting to a drop of nearly two-thirds from its peak.

Tyler Richey, an analyst at Sevens Report Research, said the decline of the stock price in recent weeks has coincided with the emergence of Vice President Kamala Harris as the Democratic presidential nominee. A surge for Harris in voter surveys has damaged perception of Trump’s election prospects, Richey told ABC News.

“The stock has ebbed and flowed with sentiment toward former president Trump,” Richey said. “It doesn’t help that Trump was pretty much exclusively using Truth Social and decided to join Elon Musk with X.”

Jay Ritter, a professor of finance at the University of Florida, said Truth Social’s poor financial performance leaves it vulnerable to negative news and darkens its long-term outlook.

“For a long time, I’ve been saying that the stock will be volatile but that the long-run trend will be down,” Ritter said.

“What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter added, noting by contrast that it makes sense for die-hard Trump supporters to back the stock.

“I don’t think it’s irrational for people to do that,” Ritter said. “On the other hand, I generally don’t go out of my way to further line the pockets of billionaires.”

Trump supporters rushing to purchase shares in Truth Social provided other investors an opportunity to cash in on the company’s tumultuous stock price. With anticipation building ahead of Trump Media & Technology Group’s merger in March with Digital World Acquisition Corporation, Mitchell Standley exercised a few call options – contracts that allow an investor to buy a stock at a predetermined price – to make a 1,500% return on his investment.

“It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.”

Since March, Standley has avoided the company, he said, attributing its volatile stock performance to a lack of business fundamentals.

“I made my money and am staying away from it,” Standley said.