Investors in Trump Media & Technology Group's stock are growing increasingly wary as shares of TMTG (DJT) experienced a significant drop of 14% on Tuesday, following an 18% decline on Monday. The main catalyst behind Tuesday's decline was the announcement of Truth Social's expansion into the streaming sector, a notoriously costly business that has proven challenging for even media giants like Disney to generate profits.

The majority-owned stock by former President Donald Trump has plummeted by over 70% since reaching its all-time high on March 26, the day after its merger with a blank-check acquisition company. Although the company still holds a substantial valuation in the billions, it is currently grappling with financial struggles and a desperate need for cash. Financial experts have cautioned potential investors about trading the stock due to its inflated valuation lacking fundamental support.

Trump Media suffered a loss of $58 million in 2023, generating a mere $4.1 million in revenue. To alleviate their financial woes, the company announced on Monday its intention to sell an additional 21.5 million shares to the public, a move that would dilute the value for existing shareholders.

The introduction of Truth Social's streaming initiative failed to excite investors. The platform stated that it spent the past six months conducting rigorous testing on its web, iPhone, and iPad apps for live TV streaming. Additionally, it expressed hopes of launching a content delivery network to enable the creation of streaming apps for smartphones, tablets, and eventually smart TVs. Truth Social intends to host live news, religious programming, and family-friendly content, including shows, movies, and documentaries that face cancellation or suppression on other platforms and services.

TMTG CEO, Devin Nunes, the former Republican congressman for California, stated, "With our streaming content, we aim to provide a permanent home for high-quality news and entertainment that face discrimination by other channels and content delivery services. There is a lot of great content that simply can't find an audience for unjust reasons, and we want to let these creators know they'll soon have a guaranteed platform where they won't be canceled."

This new venture by Truth Social bears resemblance to Elon Musk's X, which also claims to defend free speech. However, X boasts hundreds of millions of active users, far surpassing the audience size of Truth Social which has struggled to attract advertisers despite its reformation under Musk's leadership, allowing hate speech and conspiracy theories to proliferate on the platform.

The primary factor contributing to the sky-high valuation of Trump Media & Technology Group is its association with former President Donald Trump. This association has transformed the company's shares into a meme stock, where emotional responses outweigh its fundamentals within trading.

Following the stock's decline, Trump's net worth has suffered a substantial blow, falling approximately $300 million on Tuesday alone. From a peak value of $5.2 billion, his shares now amount to roughly $1.8 billion.

As the stock continues to experience turbulence, investors remain cautious of the company's ability to generate sustainable profits and overcome its financial challenges.