Social Media Company's Market Cap Falls Below $5 Billion as Trading Volatility Causes Trump Media to Plunge

• Trump media shares tumble Wednesday 10%.

• The plunge took the company's market capitalization below $5 billion for the first time since its IPO.

• Donald Trump was dropped from the Forbes list of the world's 500 richest people on Wednesday and is now ranked No. 699.

Shares of Donald Trump's social media company fell as much as 10% on Wednesday, dragging the company's market capitalization below $5 billion for the first time since its IPO.

At about 3:20 p.m. New York time, shares of Trump Media and Technology Group were trading at $34.30 per share, down 8.5%.

The stock has plunged more than 40% so far this month.

Bloomberg reported a drop in options trading volume at Truth Social's parent company, with about 70,500 carriers changing hands on Wednesday, a third of the previous 10-day average.

After Trump Media went public in late March under the name "DJT" on Nasdaq Resonance, the stock soared 67% and Donald Trump's fortune soared to nearly $7 billion, with the former president of Massachusetts owning a 58% stake in the company.

However, sharp fluctuations in stock trading have seen Trump drop out of the world's 500 richest people list, as his personal stake fell below $5.8 billion. Forbes currently ranks Trump as the 699th richest person in the world, with an estimated total wealth of $4.5 billion.

Last week, Trump Media revealed a net loss of $58 million in 2023 on revenues of just $4 million, leaving investors uneasy about the company's future growth.

As the platform struggles to take on more users, advertisers and name partners, Trump Media said in a filing with the U.S. Securities and Exchange Commission that it expects to continue to incur operating losses and negative cash flow in the near term, as well as have "significant deficiencies" in its financial reporting controls. Media guru Barry Diller last week slammed Trump Media as a "fraud."

There's also the fact that Trump may someday decide to sell a significant portion of his holdings, either after the lockup expires or if he receives a waiver from the board, which is made up of family and cronies. A Trump share sale has the potential to further drag down the share price.

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