Truth Social Stock Plunges 30%: Experts Warn of Further Overvaluation Risk
Truth Social Stock Plummets, Yet Experts Warn It May Still Be Overvalued
Despite a dramatic loss in value, financial experts suggest that the stock price for Donald Trump’s Truth Social platform may still be significantly overvalued. University of Florida finance professor Jay Ritter has indicated that the stock should be worth far less than its current market valuation.
Truth Social, which has seen its revenue drop by 30 percent compared to last year, is showing signs of a negative trajectory. This decline has raised concerns about the startup’s long-term viability and financial health.
According to Ritter’s calculations based on cash per share, the stock appears to be overvalued by approximately 1,000 percent. This assessment comes even as the social network’s valuation has plummeted from its peak, now standing at around $2.79 billion after losing $4 billion in market capitalization.
The platform’s stock price has reached a new all-time low of approximately $13 per share, a stark contrast to its previous highs. At its peak, Truth Social’s market cap exceeded $9 billion, highlighting the extent of its recent decline.
Despite these setbacks, former President Trump claims to be maintaining most of his $1.7 billion stake in the company. The share value experienced a further drop after Trump passed the insider trading ban deadline, adding to investor concerns.
Industry analysts view Truth Social as both a speculative investment tied to Trump’s reelection prospects and a potential new tech company. Tyler Richey, an market analyst, describes it as an indicator of investor and voter confidence in Trump’s presidential aspirations.
The platform has faced a challenging week, with various setbacks including Trump’s second encounter with an attempted assassin and the announcement of a new family crypto venture. These events have contributed to the growing uncertainty surrounding Truth Social’s future.
As the stock continues to decline, the outlook for Truth Social investors appears increasingly bleak, with diminishing prospects for long-term gains. Financial experts and market observers continue to monitor the situation closely as the platform navigates through these turbulent times.
