As Harris, who took over Biden's presidential campaign, becomes increasingly popular, the once highly acclaimed "Trump deal" is gradually fading away. Trump Media&Co., a media company under Trump; The stock price of Technology Group (referred to as Trump Media) has fallen by 70% since its listing.
But even after being heavily sold, the market value of Trump Media is still about $3 billion. An expert said that this number is still too high.
Jay Woods, Chief Global Strategist at investment banking firm Freedom Capital Markets, stated in a media interview that Trump Media's valuation is "unreasonable." He pointed out that according to relevant data, the company "had sales of $837000 in the previous quarter, but a net loss of $16.4 million
From a traditional valuation metric, the current market to sales ratio of Trump Media is 1864 times, and the company's revenue in the past 12 months has been less than $2 million.
In addition to the astonishing valuation, Woods also pointed out that the growth potential of Truth Social, a social platform operated by Trump Media, is limited.
They are struggling in terms of user retention and growth, and the room for growth seems limited - especially if he (Trump) loses the election, "Woods said.
Another persistent issue dragging down the stock price of Truth Social is that Trump is increasingly using his biggest competitor X (formerly Twitter) and is not focused on Truth Social.
In addition, the lock up period for insiders selling Trump Media stocks has recently ended, which may bring further pressure to the stock.
One of the largest shareholders of Trump Media, United Atlantic Ventures, almost sold out its shares after the lock up period ended.
Although Trump has previously stated that he will not sell the stock after the lock up period ends, no one can guarantee that he will not change his mind. Currently, Trump holds 57% of the company's equity.
If the largest shareholder significantly sells their stocks, it may trigger panic among other internal shareholders, leading to a sharp decline in stock prices, "Woods said.