Trump Loses $1 Billion in Net Worth as Short Sellers Bet DJT Stock Will Collapse: A Closer Look

Late Night with Seth Meyers
4 Apr 202410:38

Summary

TLDRThe video discusses the significant devaluation of Donald Trump's net worth by over $1 billion, following a sharp decline in the stock price of his struggling social media company. Despite initial success after going public, the company faced substantial losses and shrinking user base, leading to skepticism about its long-term viability. The situation is further complicated by a legal battle involving Trump and his co-founders, with investors betting against the company's success.

Takeaways

  • 📉 Donald Trump's net worth dropped by over $1 billion following a significant decline in the stock price of his social media company.
  • 💡 The company's stock price fell by more than 20%, highlighting the precarious nature of the financial situation and investor confidence.
  • 🔍 The legal battle between Trump, his co-founders, and investors has intensified, with millions being bet on the company's potential collapse.
  • 🤔 The stock market's performance is not necessarily indicative of the overall health of the economy, as the wealthiest 10% of Americans own the majority of stocks.
  • 🚀 Despite the company's losses and shrinking user base, its initial public valuation was over $7 billion, raising questions about market fundamentals.
  • 📊 Trump Media and Technology Group, the parent company of Truth Social, reported a loss of $58 million and generated only $4.1 million in revenue.
  • 📉 The monthly active US users on iOS and Android platforms decreased by 51% year over year, reflecting the platform's struggle to maintain and grow its user base.
  • 🏛️ The ongoing legal dispute involves Trump suing the co-founders of Truth Social in an attempt to prevent them from retaining their company shares.
  • 💸 The company's stock is popular among short sellers, who are betting that the stock price will continue to fall.
  • 🎭 The situation has been compared to a meme stock, with experts and investors alike questioning the long-term viability and value of the company.

Q & A

  • What happened to Donald Trump's net worth after the stock price of his social media company fell?

    -Donald Trump's net worth plunged by more than $1 billion following a significant drop in the stock price of his struggling social media company.

  • What was the percentage decrease in the company's stock price amid the legal battle?

    -The company's stock price fell by more than 20% amid a legal battle involving Trump and his co-founders.

  • What is the name of Trump's social media company?

    -Trump's social media company is called Truth Social, which is a part of the Trump Media and Technology Group.

  • How did the stock market perform on the first day of trading for Trump's media company?

    -On its first day of trading on NASDAQ, the stock surged 56% at one point during trading to $78 a share, before closing at $58.

  • What was the reported revenue of Truth Social in the year prior to going public?

    -Truth Social's owner, Trump Media, generated just $4.1 million in revenue and lost $58 million in the year before the company went public.

  • How did the user base of Truth Social change in a year?

    -Monthly active US users on iOS and Android for Truth Social decreased by 51% year over year.

  • What type of stock is Trump's company being compared to by some experts?

    -Some experts are comparing Trump's company to a meme stock, which is a stock that becomes inflated beyond its underlying value due to online investor activity.

  • What is the main reason behind the legal battle involving Trump, his co-founders, and the company's stock?

    -The legal battle is due to Trump suing the co-founders of Truth Social to prevent them from keeping shares in the company, claiming they made costly mistakes that delayed the company from going public.

  • What are some investors doing in relation to the stock of Trump's media company?

    -Some investors are betting against the stock, making it a popular target for short sellers who believe the price will fall.

  • What was the impact of the legal battle and the company's financial performance on investor confidence?

    -The legal battle and the company's poor financial performance, including significant losses and a shrinking user base, have led to a decrease in investor confidence and a drop in the stock's value.

  • What is the main message conveyed about the stock market in this script?

    -The main message is that the stock market is not the real economy and can be influenced by factors such as investor sentiment and market speculation, as demonstrated by the volatile performance of Trump's media company's stock.

Outlines

00:00

📉 Trump's Net Worth Tumble Amid Legal Struggles and Stock Fluctuations

The first paragraph discusses the significant decrease in Donald Trump's net worth by over $1 billion, following a more than 20% drop in the stock price of his struggling social media company. The company, Trump Media and Technology Group, parent of Truth Social, experienced huge losses in a legal battle involving Trump and his co-founders. Investors are now placing bets on the company's potential collapse. The paragraph also touches on the broader theme of the stock market's performance and its relation to the real economy, highlighting that the wealthiest 10% of Americans own the majority of stocks and that the stock market's success does not necessarily reflect the underlying health of the economy. The narrative provides an example of Trump's inflated net worth due to the initial public offering of his media company, which soared to high levels before crashing back down, illustrating the volatile nature of such financial gains.

05:03

💸 Financial Reality and the Truth Behind Trump's Social Media Venture

The second paragraph delves into the financial realities of Trump Media and its social media platform, Truth Social. It highlights the company's significant losses, amounting to $58 million in the previous year, and the minimal revenue generated, which was only $4.1 million. The paragraph points out the discrepancy between the company's public valuation and its actual business performance, with a sharp decline in monthly active users on its platform. The narrative also discusses the skepticism from various experts and investors, comparing the stock to a meme stock like GameStop, and the contentious legal battle involving Trump and the co-founders of Truth Social. The paragraph concludes by emphasizing the unpredictability and speculative nature of the stock market, particularly in relation to Trump's media venture.

10:06

😄 A Light-Hearted Look at the News

The third paragraph provides a brief and humorous interlude from the serious financial discussion of the previous paragraphs. It presents a light-hearted commentary on the news and the host's approach to addressing corrections and feedback from viewers. The paragraph suggests that there is a separate segment dedicated to addressing viewer comments and correcting any inaccuracies from the weekly show, offering a platform for engagement and accountability.

Mindmap

Keywords

💡net worth

Net worth refers to the total value of an individual's or company's assets minus their liabilities. In the context of the video, it is used to discuss the significant fluctuation in Donald Trump's personal wealth due to the volatile stock prices of his media company. The video highlights how Trump's net worth increased and then decreased by billions of dollars as a result of the company's stock performance.

💡stock price

The stock price represents the current market value of a single share of a company's stock. It is a key indicator of a company's financial health and investor confidence. In the video, the focus is on the dramatic drop in the stock price of Trump's social media company, which directly impacts his net worth and the company's overall valuation.

💡legal battle

A legal battle refers to a contentious lawsuit or series of lawsuits between parties. In the video, the legal battle involves Donald Trump and his co-founders, where there are claims of costly mistakes and attempts to dilute shares. This conflict adds uncertainty and risk for investors and affects the company's stock performance.

💡investors

Investors are individuals or entities that put money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit. In the context of the video, investors are betting against the success of Trump's company, leading to a decrease in its stock price and impacting Trump's net worth.

💡Truth Social

Truth Social is a social media platform launched by Donald Trump's company, Trump Media and Technology Group. It is often referred to as a Twitter rival and is intended to provide an alternative platform for conservative voices. The video discusses the platform's struggles in terms of user base and revenue, which directly affects the company's stock performance and Trump's net worth.

💡stock market

The stock market is a public marketplace for the trading of company stock shares. It is often seen as an indicator of the overall health of the economy. However, the video argues that the stock market does not always reflect the real economy, especially when it comes to companies like Trump's Truth Social, where the stock's value is inflated beyond its actual business performance.

💡meme stock

A meme stock is a term used to describe a stock that increases in price not because of its underlying value but because of hype and social media attention. In the video, Trump's media company stock is compared to a meme stock like GameStop, where the price is inflated by online investors despite the company's poor financial performance.

💡short sellers

Short sellers are investors who bet against a company's stock by selling shares they have borrowed, with the expectation that they can buy them back at a lower price in the future. This is a speculative strategy that profits from a decrease in the stock's price. In the video, short sellers are targeting Trump's media company, indicating a widespread belief that the stock's value will decline.

💡unrealized gains

Unrealized gains refer to the increase in the value of an asset, such as stocks, that have not yet been sold and thus the gains are not yet realized or converted into cash. In the context of the video, it highlights how Trump's net worth temporarily increased on paper due to the rising stock price of his company, but he could not access or use this wealth until the gains are realized.

💡contentious lawsuit

A contentious lawsuit is a legal dispute that is highly debated and argued between parties, often with strong disagreements and conflicting interests. In the video, the contentious lawsuit refers to the legal conflict between Trump and the co-founders of his media company, where both sides have filed lawsuits against each other, impacting the company's stability and stock value.

💡market capitalization

Market capitalization, or market cap, is the total value of all a company's shares of stock, and it provides a measure of a company's size relative to other companies in the market. In the video, the discussion around market capitalization highlights the discrepancy between the high valuation of Trump's media company and its actual business performance, suggesting that the stock's value is not supported by the company's fundamentals.

Highlights

Donald Trump's net worth dropped by over $1 billion following a significant decrease in the stock price of his social media company.

The social media company faced substantial losses in a legal battle between Trump, his co-founders, and investors.

Investors are betting millions of dollars on the potential collapse of the company.

Trump has a history of taking credit for the stock market's success, even after leaving office.

The stock market's performance is not necessarily indicative of the overall health of the economy.

The wealthiest 10% of Americans own 93% of the stocks, highlighting the disparity in wealth distribution.

Trump Media and Technology Group, the parent company of Truth Social, experienced a massive increase in stock value upon going public, despite financial losses and user decline.

Trump's net worth on paper increased by $4 billion in one day due to the stock surge.

The increase in net worth was short-lived as the stock price fell, resulting in a $1 billion loss.

Truth Social's user base on iOS and Android devices decreased by 51% year over year.

The company generated only $4.1 million in revenue last year, while losing $58 million.

Experts have labeled the stock as a 'meme stock,' comparing it to GameStop's inflated stock price.

Short sellers are betting against the stock, viewing it as overvalued.

Trump is involved in a legal battle with the co-founders of Truth Social, attempting to prevent them from retaining company shares.

The legal conflict arose from claims that Trump and other leaders sought to dilute the co-founders' shares prior to a merger.

The stock market's unpredictability is likened to a casino, with Trump's social media company being the latest example.

The situation reflects the disconnection between a company's market valuation and its actual business performance.

Transcripts

00:02

Donald Trump's net worth plunged

00:03

by more than $1 billion

00:05

after the stock price of his struggling social media company

00:07

fell by more than 20%

00:08

amid huge losses in a legal battle between Trump

00:10

and his co-founders,

00:12

and now investors are betting millions

00:13

that the company will collapse.

00:15

For more on this, it's time for "A Closer Look."

00:16

♪♪

00:20

Presidents from both parties

00:22

love to brag about the success of the stock market.

00:24

In fact,

00:26

Trump cares so much about the stock market's performance,

00:28

he's tried to claim credit for its success

00:30

after he left office.

00:32

But even his biggest boosters like Fox host Maria Bartiromo

00:34

aren't buying it.

00:35

-The Biden team can say, well,

00:37

if things are so bad, how come the stock market is on a roll?

00:40

-Because they think I'm going to be elected.

00:42

-You think the stock market's rallying

00:44

because people think you'll be elected?

00:45

-I do, yeah.

00:46

-Even Maria Bartiromo doesn't believe it.

00:48

Look at her face.

00:50

She's so shocked, she turned into Rudy.

00:54

By the way, if you invested $20 in us

00:57

using the Rudy Eyes graphic five years ago,

00:59

you'd be a millionaire right now.

01:02

That's the face you make

01:04

when a buddy tells you the Mets are going to win

01:05

it all this year.

01:07

"You think the Mets are going to win the World Series?"

01:09

"I do, yeah. They started 0-5 on purpose,

01:11

to lull the rest of the league into a false sense of security.

01:14

And then when everyone's guard is down,

01:15

they pounce -- and they just lost again.

01:17

Oh, [bleep].

01:19

It's all part of the plan! [Bleep]."

01:21

All presidents do this.

01:23

Trump just takes it to absurd extremes,

01:25

as he always does.

01:27

But the stock market is not the real economy.

01:28

For one thing,

01:30

the wealthiest 10% of Americans own 93% of the stocks.

01:32

Although you don't need a study to tell you that.

01:34

Just go to any Manhattan dinner party.

01:36

I can't tell you the number of times

01:37

I've sat next to someone talking to me

01:39

about margin calls and options trading,

01:41

and I don't know what the [bleep]

01:42

any of those terms mean,

01:44

which is why whenever I get invited to a dinner party now,

01:46

I always RSVP with a note

01:48

that says, "Please sit me next to your dumbest guest."

01:51

"Oh, and there's my nametag.

01:54

Oh, hello, Mr. Mayor."

01:57

"Are you going to eat your roll?

01:59

If not, I'm going to take it home in my pocket."

02:02

The stock market does not fully reflect the underlying health

02:06

of the economy, and there's no better current example of that

02:09

than Trump Media and Technology Group,

02:12

the parent company of Trump's tiny and struggling

02:14

Twitter ripoff, Truth Social.

02:15

When the company went public last week,

02:17

it soared to shocking highs,

02:18

despite the fact that it has lost money and users,

02:21

which in turn, massively inflated

02:23

Trump's net worth on paper.

02:24

-More breaking news tonight involving Donald Trump.

02:27

His media company, which of course includes Truth Social,

02:29

soaring in its first day of trading on NASDAQ,

02:32

surging 56% at one point during trading to $78 a share

02:36

before closing at $58.

02:38

-Trump now owns 60% of the new Trump media company,

02:41

or roughly $78 million a share,

02:44

a stake that is, on paper at this hour,

02:47

worth $4.6 billion.

02:50

-The higher the stock goes,

02:52

the higher that Donald Trump's net worth is.

02:55

At yesterday's close,

02:56

Trump's net worth, according to Bloomberg,

02:58

a little over $7 billion.

02:59

It went up by $4 billion on Monday alone.

03:03

-That's right.

03:05

Trump's net worth went up by $4 billion in one day.

03:06

Here's actual footage of me waking up to that news.

03:10

-He can't keep getting away with this!

03:16

-Now, to be clear, that's only on paper.

03:18

Those are unrealized gains.

03:20

Donald Trump can't spend

03:21

or borrow against any of that money yet,

03:23

although you know Donald Trump doesn't see it that way.

03:25

When Trump heard that his net worth increased by $4 billion,

03:28

he immediately ran out, bought a Ferrari,

03:30

a Scrooge McDuck money pool, and a beautiful new head of hair.

03:32

The only the only way

03:34

Trump would admit the money wasn't real is

03:37

if Rudy asked Trump to pay his outstanding legal bills.

03:40

"I made $4 bil this week, baby."

03:42

"That's great boss. Now can you finally pay me?"

03:44

"Actually, Rudy, that's just on paper.

03:46

Those are unrealized gains

03:50

that I legally cannot spend or borrow against

03:52

until the six-month lockup period has expired,

03:56

or until the board votes to allow me to cash out.

03:57

I'm heartbroken, Rudy, I really am."

04:01

"Oh, I'll be fine, boss. Seth Meyers gave me his dinner roll."

04:07

Again, this is all paper money so far.

04:09

It's not real yet.

04:11

Just as easily as Trump's net worth went up

04:12

and come crashing back down,

04:14

which is partially what happened on Monday

04:16

when the stock price fell.

04:18

-Truth Social hit the NASDAQ last week with a bang,

04:21

but now it's taking blows.

04:23

The stock, which is listed as DJT,

04:25

lost roughly $4 billion in value in its first week of trading.

04:30

-The company's stock fell more than 20%,

04:33

and Donald Trump's net worth fell more than $1 billion.

04:36

-That's right, his net worth fell by $1 billion in one day.

04:38

He basically lost the entirety of Taylor Swift's net worth.

04:41

And by the way, she got that money.

04:44

That's not theoretical.

04:46

She can buy private jets with her debit card.

04:49

And she made that money from writing and performing,

04:52

not from slapping her name on a money-losing Twitter ripoff.

04:54

Although, she could definitely do that.

04:55

I'd be first in line

04:57

to sign up for a new social media app called TayTok.

04:59

I do that. I would do that.

05:02

So why did the stock suddenly start to tank?

05:04

Well, reality probably caught up with it.

05:06

The company's value was completely divorced

05:08

from its underlying business.

05:10

-So here's the latest numbers that are concerning investors.

05:13

Truth Social owner Trump Media lost $58 million last year,

05:18

and it generated very, very little revenue,

05:21

just $4.1 million in revenue.

05:25

And some of this is not shocking,

05:26

because we know that Truth Social is struggling.

05:29

I mean, it is shrinking.

05:31

Monthly active US users on iOS and Android

05:35

down 51% year over year.

05:37

I think all of this just underscores why

05:40

there's a lot of warnings out there

05:42

about this stock, right?

05:43

One professor told me it's a bubble.

05:45

Another basically called it a meme stock.

05:47

-There's no way Trump knows what a meme stock is.

05:49

He probably doesn't even know the word "meme."

05:51

"I own it and it has my name in it.

05:53

It's a me-me stock."

05:56

So the company lost $58 million and more than half of its users.

06:00

And yet, when it went public,

06:02

it was first valued at over $7 billion.

06:04

I'm sure you're asking, how is that possible?

06:06

Well, there's an actually perfectly reasonable

06:08

explanation, but involves a lot of complex financial jargon

06:11

and some very technical, obscure macroeconomic principles

06:14

that will take me a long time to explain,

06:16

so just do your best to follow along.

06:18

Ready?

06:19

The stock market is bull[bleep].

06:21

[ Laughter ]

06:22

[ Cheers and applause ]

06:27

By calling it a meme stock,

06:30

experts are basically comparing the Trump stock

06:31

to GameStop,

06:33

a stock whose price gets inflated

06:35

beyond its underlying value by online investors.

06:36

But in the case of GameStop,

06:38

there was at least an actual business.

06:39

Here's how one commentator

06:41

on the infamous WallStreetBets subreddit

06:43

explained the situation.

06:44

"If you invest in this on a long enough timeline,

06:46

you will lose everything.

06:47

If you think Donald Trump is going to create

06:49

an income positive social media platform,

06:50

you are an absolute [bleep] moron."

06:52

Now, in fairness,

06:53

that's not just some dude's opinion.

06:55

He's quoting the company slogan.

06:58

Agree or disagree,

06:59

you gotta love the harsh wisdom of Reddit investors.

07:02

Reporters and financial experts

07:04

in the mainstream media are all carefully parsing their words

07:06

and saying stuff like, "The fundamentals of the business

07:08

do not support the current market capitalization

07:10

of the publicly traded securities."

07:11

If the dudes on Reddit ran CNN, the headline would say,

07:14

"This [bleep] is worthless, mother[bleep]."

07:17

And here's the real tell

07:18

that everyone knows Trump's stock is actually worthless.

07:20

Investors are betting against it.

07:21

"The New York Times" reported this week

07:23

that "Traders Are Betting Millions

07:24

That Trump Media Will Tumble."

07:25

In fact,

07:27

the parent company of Truth Social

07:28

is a popular target for short sellers.

07:30

Short sellers bet that the price of a stock will fall.

07:33

They do that by borrowing shares of a company

07:35

and selling them into the market,

07:37

hoping to buy them back later at a lower price,

07:39

before returning the shares to the lender

07:41

and pocketing the difference as profit.

07:43

Again, there's no way Trump understands any of that.

07:45

I guarantee when Trump's aides told him

07:47

investors were shorting his stock,

07:49

he thought they meant that short people were buying a stock.

07:52

"Look, I don't like the man,

07:54

but I'll gladly take an investment from Ron DeSantis.

07:57

He can keep his earnings in his little white boots.

08:00

We love the little, white boots."

08:03

And yeah, as if Trump stock needed any more reasons

08:05

to go down in flames,

08:06

on top of everything else,

08:08

it is now the subject of a contentious legal battle

08:10

in which Trump is basically trying to kick out

08:12

the co-founders of the company

08:14

so he can keep the stock all to himself.

08:16

-The former president is suing the co-founders of Truth Social

08:19

in an effort to prevent them from keeping shares

08:22

in the company's stock.

08:24

The former president's attorneys claim

08:26

that Andy Litinsky and Wes Moss made a series of costly mistakes

08:31

that delayed the company from going public.

08:33

Trump's legal team asked the judge to strip both men

08:36

of their shares in the company.

08:37

This after Litinsky and Moss

08:39

filed a lawsuit in February claiming that Trump

08:42

and other leaders scheme to dilute their shares prior

08:45

to a merger, which would allow the company to then go public.

08:49

-How many court battles can one person have?

08:51

This guy is in court more than this lady.

08:54

Here's what happened.

08:56

These guys essentially brought the deal to Trump.

08:58

They took the company public, and in the process,

09:00

they basically dumped a few billion

09:01

in paper money into his lap.

09:03

And Trump is now thanking them by suing

09:05

to take their stock away.

09:07

Dude, just take the [bleep] W. Your company is worthless.

09:10

This is like Alaska Airlines suing the passenger

09:12

who sat next to the open door.

09:15

"You should be thanking us for the extra leg room."

09:19

The stock market is a casino.

09:20

It's not the real economy.

09:22

Trump's dumb social media company is just

09:23

the latest example of that.

09:25

And now investors are betting millions

09:26

that the stock will collapse.

09:28

It's kind of like that scene from "The Social Network,"

09:30

except in this case,

09:32

the only thing cooler than Trump losing $1 million

09:33

is Trump losing --

09:34

-$1 billion.

09:35

This has been "A Closer Look."

09:37

♪♪

09:42

[ Chuckles ] The news, right?

09:48

It can make you crazy.

09:49

But what if there was something you could watch

09:51

that only made me crazy?

09:52

Well, there it is. It's called "Corrections."

09:54

And it's every week,

09:55

where I respond to YouTube commenters

09:57

and what they've said I got wrong about each week's show.

10:00

Check it out wherever you get your YouTube videos --

10:02

so YouTube, where you are right now.

10:05

[ Silence ]

10:10

[ Scattered laughter ]

10:20

[ Scattered laughter ]

10:24

I can be here all day.

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العلامات ذات الصلة
Financial AnalysisTrump's Net WorthStock MarketTruth SocialInvestment RisksMeme StockLegal BattleMedia IndustryEconomic IndicatorsSatirical Review
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