Despite the Trump trial and upcoming election, the popularity of Truth Social continues to decline.

While the Trump Media & Technology Group (DJT) is generating minimal revenue, investors have given the company an impressive valuation of more than $9 billion. This places a significant value on Donald Trump's stake in the company, which is now worth approximately $6 billion.

Despite its immense valuation, recent data reveals that Truth Social, the conservative-friendly social network from Trump Media, is struggling to maintain a foothold in its industry. In April, the average number of daily active US users on iOS and Android platforms for Truth Social dropped by 19%. Similarweb, a data intelligence company, shared this information with CNN.

This decline is even more concerning given the attention focused on the ongoing Trump criminal trial and the upcoming US presidential election. However, the numbers also indicate that Truth Social's user base is diminishing despite these high-profile events. The average number of users dropped by 4% month over month.

This is detrimental as both Trump Media and Donald Trump himself rely on the success of Truth Social. Trump serves as the chairman of the company and is its most popular user.

"User growth is critical for any social media startup," said Matthew Kennedy, a senior initial public offering strategist at Renaissance Capital, which specializes in pre-IPO research and IPO-focused exchange-traded funds (ETFs). "Social media companies are speculative businesses, and the success of TMTG depends heavily on the growth of its user base."

He added that platforms that struggle to attract users will face challenges in making money and sustaining this business model in the long run.

Social media platforms are characterized by what is known as network effects; the more users a platform has, the more valuable it becomes. In other words, joining a popular platform can encourage more people to join or return, thus expanding the user base. Conversely, a lack of users can push potential users towards existing alternatives.

Even Trump Media admitted that user growth is crucial to its business in a filing earlier this year. It warned investors that a failure to grow users could harm its business prospects.

A spokesperson for Trump Media responded to a CNN query, defending the platform's user growth and criticizing the media.

"Truth Social has amassed millions of users, and our user base is rapidly expanding daily," said Shannon Devine. "It's unsurprising to see the politicized media cherry-pick some unreliable estimate to downplay our success."

When compared to other platforms in the same industry, Truth Social's decline is notably more significant. For instance, X, the platform recently acquired by Elon Musk and formerly known as Twitter, experienced a 12% year-over-year decline in the average number of daily active US users. X's numbers were up slightly (0.4%) on a monthly basis.

Conversely, both Reddit and Threads increased their average number of daily active US users on iOS and Android platforms. Reddit, which went public earlier this year, saw a 7% increase in users on a year-over-year basis, while Threads experienced an 8% increase in users on a month-over-month basis based on Similarweb data.

Another conservative-favored platform, Rumble, experienced a 17% year-over-year decline in average daily active users and little change on a monthly basis. The data shows declining usage across the board for these platforms, but Truth Social's user base has fallen faster than most.

However, Truth Social did not lose users as rapidly as Gettr, a pro-Trump social media platform that has lost more than 70% of its average daily users on iOS and Android over the past year.

Truth Social's weak online presence is reflected in its web traffic as well. The daily average of unique US visitors to Truth Social's website declined by 12% from the previous year and by 21% on a monthly basis, according to Similarweb.

Combining the web and app audiences in the US, Truth Social accounts for less than 6% of Threads' audience and less than 1% of X's total audience.

"Truth Social has a hefty valuation, considering its relatively small size compared to other social media players," said Tom Liu, vice president of data labs at Similarweb. "Many of these larger platforms have encountered financial challenges, and Truth Social's high valuation appears, in part, to be rooted in investor support for Trump."

As a result, as Trump Media competes with other platforms for users, it will have to prove that Truth Social can become more successful as a standalone platform.

"Convincing potential users who oppose big tech censorship of the value of Truth Social is critical to increasing TMTG's user base and ensuring the success of TMTG's business model," Trump Media stated in its filing.

Some critics attribute the high valuation of Trump Media to the "meme stock" phenomenon, which allows retail investors to artificially inflate the value of a stock based on social media chatter and posts, rather than financial fundamentals.

Regardless of its specific cause, the stagnation of Truth Social's user growth and the reliance on Trump's brand could negatively impact the company's ability to generate revenue and survive in a competitive landscape dominated by other social media giants.

The previous head of state has decided not to sell that shareholding for several months at least. It's pretty challenging to estimate what the value of that shareholding will be once the "lockup period" ends, considering Trump Media's share price has exhibited extraordinary volatility.

In the 2 days since Trump Media turned public, its price per share soared past $66. However, on April 16, it plummeted to a post-merger low of $22.84. Since then, it has more than doubled in value, ending at $48.68 on Thursday.

Kennedy points out that including all warrants, Trump Media holds a diluted market cap of $9.4 billion.

Kennedy does acknowledge there is a counter-argument that Trump Media isn't like a typical social media stock, thus traditional metrics like growth and earnings don't apply.

"This is the 'meme stock argument'," Kennedy claimed. "Stocks can become unhinged from their fundamentals for a moment, but in the end, the valuation and the fundamentals tend to align."