In the aftermath of Donald Trump’s media venture’s meteoric rise, with the company’s valuation reaching a staggering $6.5 billion last month, experts and business leaders continue to express skepticism about the future of Trump Media’s stock.
IAC and Expedia Chairman Barry Diller didn’t mince words during an interview with CNBC on Thursday, labeling Trump Media as “a scam” and criticizing those investing in its stock as “dopes.” Diller’s scathing remarks come amidst concerns over the company’s lack of revenue despite its lofty valuation.
“It’s ridiculous,” Diller exclaimed on CNBC’s “Squawk Box.” “The company has no revenue. It’s a scam, just like everything he’s ever been involved in is some sort of con,” he added, referring to Trump.
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According to CNBC, a Trump Media spokeswoman, in response to Diller’s comments, said, “It is unsurprising to see die-hard Trump haters and leftwing flacks blow a gasket now that Truth Social has become a public company that, still today, refuses to suppress political expression that contradicts the narratives they want to enforce.”
When Trump Media debuted on the market last week with the ticker DJT, its stock price surged by approximately 50% to nearly $80 before stabilizing. However, by Thursday morning, Trump Media shares were trading at approximately $47.
Despite the company generating just $4.1 million in revenue last year and primarily focusing on the Truth Social app, which has significantly fewer users compared to major social media platforms, Trump Media boasts a market capitalization of a staggering $6.4 billion.
In 2023, Trump Media reported net losses of $58 million.
Barry Diller likened the surge in Trump Media’s stock price to the “meme stock” phenomenon of 2021, during which the shares of GameStop skyrocketed to nearly $500 and AMC Entertainment’s share price surged to over $700.
As of Thursday morning, GameStop shares were trading at less than $12 each, while AMC shares were valued at just over $3.
“I think they’re dopes,” Diller said when asked why people are buying the company’s stock.
“I mean, who would buy a company that literally, what does it have, $30 of revenue? Who could put a value on that?” Diller asked.
“They’re buying it for other reasons, just like they bought theaters when there was no theater business or bought GameStop, whatever.”
“It’s stupid. Stupid stuff,” he said.
Asked if Trump Media could ever become a bigger business than it is now, particularly if Trump is elected president later this year, Diller flatly replied, “No … no.”
“Look, he’s only interesting now because he’s out there entertaining the folks,” Diller said. “I hope if he gets elected he just plays golf for four years.”
Investor confidence took a significant blow as Trump Media’s stock plunged by more than 21% on Monday, following the revelation of its financial struggles. Despite showing improvement with a revenue of $4.1 million in 2023 compared to $1.5 million in 2022, the company’s losses outweighed its gains.
Trump Media’s foray into the public market began with its merger with Digital World Acquisition Corp., a blank-check company, leading to its listing on the Nasdaq stock market under the ticker symbol DJT on March 26. Initial trading witnessed a surge in stock prices, with shares climbing to over $79 at one point.
However, the initial excitement quickly dissipated, and the stock has since retreated closer to its initial offering price.