Donald Trump’s tiny social media empire has seen its extraordinary stock market rally wiped out by a steep sell-off. Shares in Trump Media & Technology Group, owner of Truth Social, closed below $17 on Wednesday, reversing all their gains since the company’s rapid rise took hold in January. The former president has been prohibited by a lock-up agreement from starting to sell shares in the firm until late September. While his majority stake in the firm is still worth some $2bn on paper, its value has fallen dramatically from $4.9bn in March. As a business, TMTG is not growing rapidly. It generated sales of just $4.13m in 2023, according to regulatory filings, and lost $58.2m. Nor is Truth Social growing rapidly as a platform. While TMTG has not disclosed the size of its user base, the research firm Similarweb estimated that in March it had 7.7m visits – while X, formerly Twitter, had 6.1bn. That same month, however, TMTG was valued at almost $10bn on the stock market. The former president is potentially on the hook for hundreds of millions of dollars’ worth of penalties following two civil trials, taking a significant chunk out of his personal fortune. Trump Media has, however, previously insisted that there is no “conceivable sign anywhere” that Trump plans to sell shares in TMTG. After being banned from Twitter and then eschewing the platform once the ban had been lifted, Trump recently returned to X. He participated in a lengthy interview on the platform with its owner, Elon Musk. TMTG’s short-lived surge on the market was driven by its transformation into a so-called “meme stock”, joining a small bevy of stocks, most famously the video games retailer GameStop, which rattled Wall Street by staging unexpected, volatile rallies. Digital World Acquisition Corp, a shell company, first announced plans to merge with TMTG and take Trump’s fledgling media firm public in October 2021. But the process was stalled by a series of legal hurdles. Earlier this year, as Trump dominated the Republican primaries, and it became clear that TMTG would finally land on the stock market, Digital World’s stock was drawn center stage. The volume of trading in Digital World – how many of its shares changed hands – increased exponentially. On one day in December, fewer than 100,000 shares were traded; on one day in January, 29.7m shares were traded. As with other meme stocks, interest was heightened by a flurry of internet memes, urging retail investors to buy in. What made this different was that many of the memes were being shared on Truth Social: the platform owned by the very company Digital World was set to take public. When Digital World and TMTG finally combined in March, it initially pored fuel on the fire. But as GameStop and AMC Entertainment have shown, the peaks reached during these rapid rallies typically set the stage for an almighty crash.