Donald Trump‘s social networking site Truth Social, owned by Trump Media and Technology Group DJT is reportedly experiencing a significant decline in its U.S. user base, despite a high-profile media campaign.
What Happened: The microblogging platform’s traffic initially surged after Trump Media went public and began trading on the Nasdaq under the ticker DJT. However, the U.S. daily visits to Truth Social have decreased by over 21% in May compared to April, and by more than 35% compared to March, reported CNBC, citing digital intelligence platform Similarweb.
The site’s average monthly visits over the past year, totaling just over 4 million from May 2023 to April 2024, have dropped by more than 39% compared to the previous 12-month period from May 2022 to April 2023.
TMTG did not immediately respond to Benzinga's request for comment.
This decline has occurred despite the extensive media coverage of Trump’s criminal trial and his campaign to unseat President Joe Biden.
Trump Media relies solely on ad sales for revenue and notes in its SEC filings that a drop in user engagement could negatively impact its business by making Truth Social less appealing to advertisers, the report noted.
In an interview, David Carr, Similarweb's editor of insights, news, and research, said, “If you can't demonstrate that you have a sizeable, active, engaged, growing audience, I don't understand how you create a successful ad-supported social media business.”
The data firms’ findings may reinforce Wall Street analysts’ perception of the company as a “meme stock,” with a market capitalization that is disconnected from its business fundamentals.
“We basically don't see anything in these digital indicators that would explain why the valuation is as high as it is,” Carr added.
Trump Media reported a first-quarter net loss of nearly $328 million on revenues of about $771,000. Despite this, the company’s market cap is slightly over $8 billion.
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Why It Matters: The decline in Truth Social’s user base comes at a time when Trump Media is facing other challenges. Earlier this month, amid SEC fraud allegations, Trump Media replaced its auditors and called for a legislative probe into the short-selling of its shares, a move financial journalist Herb Greenberg criticized as a “diversion tactic.”
In May, the company also granted Trump a stock bonus worth $1.8 billion, raising his stake in the company to over $5.7 billion. This bonus was awarded for keeping the stock price above $17.50 for 20 consecutive trading days. Soon after, Trump Media’s tech-ad partner, Rumble, filed a lawsuit against Google for over $1 billion, accusing it of monopolistic practices in digital advertising.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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