New York, USA – Shares of Trump Media & Technology Group, the owner of Truth Social, took a steep dive on Monday after revealing significant financial losses and minimal revenue for the year 2023. The disclosed numbers paint a grim picture, raising questions about the validity of Trump Media’s multibillion-dollar valuation, which some experts liken to the volatile meme stock frenzy.
In a regulatory filing released on Monday, Trump Media disclosed a staggering loss of $58.2 million in 2023, a sharp contrast to the $50.5 million profit recorded in the previous year. Despite a slight increase in revenue to $4.1 million, up from $1.5 million in 2022, the company faced a 39% decline in revenue in the fourth quarter alone.
The stock market reacted swiftly to the news, with Trump Media’s shares plummeting by 24% on Monday afternoon. However, despite this decline, the shares still boasted a nearly 200% increase year-to-date. Former President Donald Trump, holding a major stake of 78.8 million shares in the company, saw his stake’s value drop to around $3.8 billion from a peak of approximately $6.3 billion just a week earlier.
The substantial losses reported on Monday have raised concerns about Trump Media’s financial sustainability, with accountants cautioning about the company’s ability to remain operational. The completion of a long-awaited merger last week injected approximately $300 million into Trump Media, offering some relief and a chance to address debts and improve infrastructure.
Despite the bleak financial outlook, Wall Street has valued Trump Media at as much as $11 billion based on recent stock prices, although this figure dropped to around $8.8 billion by Monday afternoon. In comparison, the revenue generated by Truth Social lags far behind its competitors, with X (formerly known as Twitter) making over 100 times more revenue in 2023.
The dwindling user base of Truth Social, with a significant drop in monthly active U.S. users, poses a significant challenge for Trump Media moving forward. As the company navigates a crucial year ahead in 2024, its success may hinge on the upcoming presidential election and support from Trump-affiliated super PACs, which have amassed sizable funds for digital advertising purposes.