P.T. Barnum, suckers and a plummeting stock

Trump has other potential legal clouds hanging over his head, of course, and now has revealed himself to be a guy who could use some more cash.

P.T. Barnum may or may not have said, “There’s a sucker born every minute.” He gets the credit in the popular mind.

Whoever was the true originator of that 19th century classic observation likely would get a proper chuckle out of the ways that Donald Trump continues to make saps out of a dismayingly large slice of the American public.

The latest example: The stock of Trump Media & Technology Corp., owner of the social media platform Truth Social, on which Trump routinely posts his “thoughts” of the day. Call letters: DJT.

The company made a splashy public debut on March 26 via a so-called SPAC transaction. Sure, the roughly $9.7 billion market value at the open seemed a tad high for a company that generated just $4.1 million in revenue last year and posted a net loss of $58.2 million.

It didn’t take long for market realities to break through what remains of the Trump mystique; the stock within days began plunging relentlessly. It’s now lost more than two-thirds of its value from its $70.90 opening. This week has been particularly rough, with the stock falling 30% as of midday Tuesday.

The latest news weighing on Truth Social’s market value was the disclosure Monday that the company may sell up to 146 million shares in a secondary offering, with much of that stock owned or controlled by Trump himself. If Trump decides to unload any or all of his shares, he can’t do so until September per a so-called lockup agreement aimed at preventing quick cash outs by founders and original investors.

But the signal sent wasn’t a positive one to those who think investing alongside Trump is the path to riches. For a man who has strived over his decadeslong career to cultivate an image of a brilliant and incredibly wealthy businessman, recent events have helped to puncture a myth that already had taken a beating during Trump’s presidency. The most recent — and embarrassing — example was Trump’s inability to post the $454 million judgment in the civil fraud case brought by New York Attorney General Letitia James while he appeals. An eleventh-hour bond deal saved him from worse financial trouble.

Trump has other potential legal clouds hanging over his head, of course, and now has revealed himself to be a guy who could use some more cash. So forgive the many Truth Social investors who’ve dumped shares in recent days for thinking the former president is a solid bet to sell at the first opportunity.

The question now is, what will Truth Social’s stock look like in September when Trump will have his first liquidation opportunity? If Trump is to reap a windfall that — even after the precipitous stock decline Truth Social has suffered — is worth about $2.6 billion on paper, it looks like some more suckers will need to step up.