In a cautionary statement, Donald Trump's biographer has raised alarm bells for investors in Trump's social media platform Truth Social, stating that their stocks may not hold any significant value and could potentially be wiped out. David Cay Johnston, a Pulitzer Prize-winning investigative journalist and author of the bestselling biography "The Making of Donald Trump," expressed his concerns on MSNBC following recent reports of decreasing share values.

Truth Social launched in February 2022, a year after the former president was banned from major platforms like Twitter and Facebook for his posts regarding the January 6 riots at the U.S. Capitol. Despite his reinstatement on these platforms, Trump has chosen to utilize Truth Social, which, in comparison to well-established platforms like Reddit and Twitter, currently has a smaller user base.

Since shareholders of Digital World Acquisition Corp. agreed to merge with Truth Social's parent company Trump Media & Technology Group (TMTG), the stock value has experienced a decline. In the first quarter of 2024, TMTG reported a net loss of $327.6 million. This loss was primarily attributed to non-cash expenses related to the company's recent merger with Digital World Acquisition Corp.

Johnston, when asked about the stock's value, commented that it was "not at all valuable" and warned that those holding onto their stocks may eventually face losses. He highlighted the substantial amount of money the company is losing and the relatively low revenue it generates. Johnston further emphasized that there is little support for a company perceived to be worth billions of dollars, suggesting that some individuals may be exploiting the company's situation with intentions to sell it short.

A regulatory filing to the Securities and Exchange Commission in April revealed that Truth Social generated just over $4.1 million in revenue in its last operating year. However, it incurred costs of $58.2 million, resulting in an operating loss of nearly $16 million.

Data from Google Finance on May 26 indicated that the value of each Truth Social share was at $45.91. While this showed an increase compared to a low of $22.84 on April 17, the stock value had declined by 9.38 percent in the last five days. Furthermore, the current value is less than its initial debut on the stock market at $57.99.

In a Forbes article published in April, veteran investment industry professional John S. Tobey issued a similar warning, stating that while the stock value may fluctuate, investors should be cautious about potential further devaluation and not wait to sell their shares. Tobey emphasized the importance of taking proactive measures when necessary and not risking losses by waiting for situations to improve.

In April, TMTG released a press statement offering guidance to shareholders on preventing brokerage firms from lending their shares for short selling purposes. The company also provided a sample email for shareholders to opt-out of securities lending programs, with a spokesperson stating their commitment to prevent retail investors from being exploited.

As of now, TMTG has not provided a public response regarding the concerns raised about the stock's value. Investors are urged to exercise caution and assess the potential risks involved in their investment decisions.