New York – The owner of Truth Social, the social media platform majority-owned by former President Donald Trump, reported significant losses exceeding $300 million in the first quarter with minimal revenue generation. This raised concerns over the company’s multi-billion dollar valuation, fueled by one-time losses associated with going public earlier in the year.
Trump Media & Technology Group, known as DJT on the stock market, disclosed a staggering loss of $327.6 million, chiefly attributed to non-cash expenses from the conversion of promissory notes and the clearing of previous liabilities. The company’s operating loss stood at $12.1 million, partly stemming from merger-related costs following its public debut.
Revenue for the company remained meager, amounting to just $770,500, marking the second consecutive quarter with revenue below the million-dollar mark. Experts expressed skepticism over the valuation of a company with such modest revenue, emphasizing the lack of substantial financial metrics for investors to evaluate its performance.
Despite the financial setbacks, Trump Media expressed confidence in its long-term development strategy, focusing on product enhancement over immediate revenue gains. The company highlighted plans to expand its advertising business and introduce new products like streaming to bolster future results.
Trump Media affirmed its financial stability, citing a cash balance of $274 million by the end of March, providing opportunities for potential mergers and acquisitions. However, market analysts questioned the exorbitant valuation of Trump Media stock in light of its financial results and limited presence in the social media landscape.
The company faced criticism for its underwhelming performance, with detractors pointing out a decline in daily active users compared to industry rivals on iOS and Android platforms. Trump Media maintained its financial transparency by engaging a new accounting firm following allegations of fraud against its previous auditor, ensuring compliance and integrity in its financial reporting.
As Truth Social continues to navigate challenges in the competitive social media arena, the company anticipates leveraging its cash reserves for growth opportunities while striving to enhance its position in the digital landscape. Despite uncertainties surrounding its financial viability, Trump Media remains determined to carve a niche in the digital sphere and offer an alternative to mainstream social media platforms.