'Outlooks mediocre or worse': Trump Media investors warned off in alarming Forbes analysis

A top contributor with Forbes Thursday warned potential Trump Media investors not to trust the company's eponymous owner with their cash in a thorough breakdown of the multiple financial risks they'd be taking.

'"There is no support, fundamental or technical, for the stock price," John S. Tobey warned. "There are no business benefits to bolster Trump Media's sales, earnings, and growth outlook."

Tobey details several problems he has with Truth Social's parent company, which saw stock prices free-fall earlier this week when news broke of a $58 million net loss in 2023.

Trump Media has also found itself embroiled in multiple civil lawsuits from company bigwigs bickering over shares in the company. Trump's own lawsuit, filed earlier this week, accuses two co-founders of "bungling their duties" and "forfeiting their stock."

While Trump Media did receive an influx of cash in its "so-called merger " with Digital World Acquisition, Tobey warned Thursday that's actually a financial red flag.

"Often, the cash injection is a lifeline that then runs out," Tobey wrote. "If a company (the "target") is value-priced, it is usually because results and outlooks are mediocre or worse."

ALSO READ: ‘Don't have enough’: Wealthy Trump allies balk at helping Donald pay legal bills

Tobey then discussed problems with the "kingpin" whose initials inspired its ticker symbol and the deal he cut for himself in the merger.

"You know Trump works hard to get money for himself," Tobey warns. "Therefore, when investing in such a person's company, you want to be sure you are getting a fair return."

Tobey details his concerns with the company's bonus structure and a deal that allows company founders to earn free shares that make up 20 percent of the company's stock.

"That means when a deal is done, the founder 'earns' the shares, and the per share book value drops," Tobey warned. "The structure of Trump Media removes the protections and assurances you have with most other publicly held companies."

While Tobey offered a hat-tip to Trump's charisma, he argued it does not go far enough to protect investors from financial peril.

"The bottom line," Tobey concluded, "Do not let personality nullify risks."