Shares of Trump Media & Technology Group took a hit this week, plunging more than 11%. This downturn comes after a disappointing earnings report and the return of former President Donald Trump to rival 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
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
that he purchased shares in Trump Media because he supports Trump's politics and believes in his businesses.

"As a Republican, I supported him. When I learned about the stock, I invested because I back the company and believe in free speech," said Schlanger, who owns around a thousand shares of the company.

A frequent user of the social media platform, Schlanger praised the user interface, describing it as "a blend of X and Facebook," and expressed enthusiasm for the company's expanding streaming services.

"I believe it has the potential to rival Facebook or Twitter in strength," said Schlanger.

Some investors explained that their primary motivation for investing in Truth Social was to express their support for the former president.

"My investment was more of a gesture of support for President Trump. I wasn't expecting to make a large profit," said Teri Lynn Roberson, who purchased five shares of the company close to its peak stock price after going public in March.

Roberson mentioned that she wasn't worried about the stock's poor performance or the potential effect of Trump's return to the rival platform X, adding that this could actually benefit his presidential campaign by reaching a wider audience beyond the "echo chamber" of Truth Social.

"I'm significantly in the red, but I'm fine with that. I'm just watching it for entertainment purposes," Roberson said.

Truth Social's stock performance holds substantial financial significance for the former president, who owns a 65% stake in the company. Truth Social shares comprise a substantial portion of Trump's overall net worth, according to Fortune .

Truth Social did not immediately respond to
' request for comment.

Truth Social's recent losses

Truth Social's financial report, released last Friday, revealed a loss exceeding $16 million over the three-month period ending in June. The company generated approximately $836,000 in revenue, marking a 30% decline from the $1.2 million earned a year prior.

In a statement issued subsequent to the release of the financial report, Truth Social CEO Devin Nunes expressed satisfaction with the company's financial standing, highlighting a cash reserve of $344 million and a debt-free status.

"From the outset, our objective was to establish Truth Social as an impenetrable bastion of free speech. By taking extraordinary measures to minimize our reliance on Big Tech, we are successfully achieving this goal," Nunes stated.

However, investors reacted negatively to the quarterly report upon the opening of trading on Monday. The stock price continued to decline after Trump made his first post in nearly a year on rival platform X. This marked only his second post on the platform since January 2021, when the company suspended Trump following the January 6th Capitol riot, citing "the risk of further incitement to violence."

Elon Musk, the tech billionaire who acquired Twitter in October 2022, lifted the ban the following month. On Monday, Musk engaged in an interview with Trump that was broadcast on the platform.

While the former president is bound by an exclusivity agreement with Trump Media & Technology Group to prioritize posting personal content on Truth Social, the agreement permits Trump to publish "politically-related" content on other social media sites. Aside from a series of political posts on Monday, Trump has avoided using social media platforms other than Truth Social.

Michael Rogers, owner of a masonry business in Asheville, North Carolina, said he initially purchased shares of Truth Social in 2022, before the company went public. Rogers has since acquired over 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
.

Trump's return to X this week didn't faze Rogers, as the platform provides Trump with a wider reach, Rogers remarked. However, he was concerned about the weak earnings report last Friday.

"The company's revenue is not meeting expectations," Rogers stated. "This is an area that needs improvement."

Despite the recent downturn in the stock price, Rogers expressed confidence in the company's long-term prospects.

"I'm in it for the long haul," Rogers said.

Analyst outlook

Analysts have categorized the performance of Truth Social as a classic example of a so-called "meme stock." The term – popularized during the pandemic era by companies such as GameStop and AMC – refers to businesses that primarily attract investors based on their ideological appeal rather than their financial prospects.

Truth Social's valuation surged by about 30% in the immediate aftermath of a July assassination attempt against Trump, reaching a price of $40 a share. This marked the stock's highest point in over a month, though it remained significantly below its peak of around $66.

The share price currently stands at around $23, a significant decline 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
.

"The stock's performance has mirrored public sentiment towards former president Trump," Richey stated. "It doesn't help that Trump primarily used Truth Social before choosing to join Elon Musk on X."

Jay Ritter, a finance professor at the University of Florida, asserted that Truth Social's weak financial performance leaves it susceptible to negative news and casts a shadow on its long-term prospects.

"For a while now, I've been predicting that the stock will experience volatility, but the long-term trend will be downward," Ritter noted.

"What's missing for those who truly believe in the company's narrative is a clear explanation of the revenue-generating business strategy," Ritter added, acknowledging that it's understandable for ardent Trump supporters to back the stock.

"I don't consider it unreasonable for people to invest in this way," Ritter remarked. "However, I generally don't actively seek to increase the wealth of billionaires."

The influx of Trump supporters eager to buy shares in Truth Social presented other investors with an opportunity to profit from the company's volatile stock price. With anticipation building ahead of Trump Media & Technology Group's merger with Digital World Acquisition Corporation in March, Mitchell Standley exercised a few call options – contracts enabling an investor to purchase a stock at a predetermined price – resulting in a 1,500% return on his investment.

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

Standley has avoided the company since March, he said, attributing its volatile stock performance to weak business fundamentals.

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