CNN Guest Gives Grim Outlook for Truth Social Stock: ‘This Thing Could Go to Zero’

Forbes Senior Editor Dan Alexander told CNN’s OutFront on Monday that investors who bought into Truth Social to support Donald Trump may very well lose their money.

Host Erin Burnett noted the social media stock has been “tanking” with shares “plunging more than 18%” amid news that the company is putting another 21.5 million shares up for sale.

“What is the bottom line for small investors who bought into Trump’s company because they believe in him?” Burnett asked.

“Well, the bottom line is they are going to get diluted, and this makes it more likely that they’re going to lose money,” Alexander said. He continued:

The problem here is that this stack was set up, and the deal was set up, in a way that allowed a lot of Wall Street insiders, and Trump, and the other people involved with his company, to get in at very, very discounted rates. Meanwhile, the retail shareholders were putting up huge sums to buy in and the ultimate effect is that they put in the cash and the other people walk away with the shares.

Burnett said, “There was a person who put a large chunk of his life savings in this company. He told The Washington Post… ‘I know good and well it’s in Trump’s hands and he’s got plans. I have no doubt it’s going to explode sometime.’ I mean, that’s, actually makes me really sad. I mean, how do you even react to that?”

Alexander answered, “Yeah, it is a sad story. And the trouble here is that if you look at the fundamentals of the company, it’s poised to go down a lot more.”

He added, “I mean, if you look at the company’s own filings, you know, they’re saying that their accountants had questions about whether it could continue as a going concern, they’re saying that bankruptcy is not out of the question eventually, so this thing could go to zero eventually.”

Watch the clip above via CNN.