9 hours ago
Truth Social Parent Company Announces $400 Million Stock Buyback
President Donald Trump's media company, the parent of his Truth Social platform, announced Monday that it will buy back $400 million of its shares, a strategy typically used to boost a company's stock value.
Trump Media and Technology Group Corp., which trades on the Nasdaq as DJT, announced that its board of directors recently approved the share repurchase.
'Since Trump Media now has approximately $3 billion on its balance sheet, we have the flexibility to take actions like this which support strong shareholder returns, as we continue exploring further strategic opportunities,' Trump Media CEO and Chairman Devin Nunes said in a statement.
Trump Media shares climbed about 3 percent Monday before retreating; by midday they were trading at $17.57, down nearly 1.5 percent. The stock has been volatile since its debut in March 2024 and is down about 48 percent year-to-date. In May, the company announced that it would raise $2.5 billion to invest in bitcoin cryptocurrency, although the buyback will not be funded by that cash, the company said.
The company has consistently lost money since it went public, posting losses of more than $400 million in 2024, according to its financial filings. The year before, it lost some $58 million.
Though Truth Social trails in monthly users compared with its larger competitors, Elon Musk's X and Meta's Threads, Trump continues to post prolifically on the platform. As of June 1, Trump had posted more than 2,200 times since his inauguration, more than three times the number of tweets he sent in the same period of his first presidency, according to a Washington Post analysis.
Share buybacks are done for a number of reasons, said Michael Roberts, professor of finance at the University of Pennsylvania's Wharton School. A company may have an excess of cash but no profitable investments to spend it on, so it buys back stock and returns value to its shareholders. It may also think its shares are undervalued, so reducing the number of shares on the market boosts the share price for shareholders.
In terms of Trump Media, 'one possibility could be that they look at their share price and they say, 'Look, we've got enormous potential that the market hasn't picked up on and we're going to buy a bunch of shares dirt cheap,' ' he said, although he noted it was unusual for a company that has posted such steep losses to repurchase shares.
Roberts noted he was not deeply familiar with Truth Social. But he said if a company was 'losing money hand over first, it would seem as though capital is at a premium – so again, trying to get rid of that capital is questionable unless the company sees its shares as a very profitable investment because they're undervalued.'
