New York, New York – Donald Trump’s social media company, Trump Media & Technology Group, faced a significant setback as it reported a loss of over $58 million last year. The company, known for owning Truth Social, saw its stock value plummet by approximately 25 percent shortly after its highly-anticipated public debut valued the company at more than $8 billion.
In a recent Securities and Exchange Commission filing, Trump Media disclosed that it only generated a little over $4 million in revenue last year, with less than $1 million earned in the final quarter of 2023. The sharp decline in the company’s stock price, identified by the DJT ticker symbol representing Trump’s initials, led to a 25 percent decrease in market value in a single day. This drop also reduced Trump’s 57 percent ownership in the company by about $1 billion, leaving it valued at $3.6 billion.
The disparity between Trump Media’s lofty investor-driven valuation on the stock market and its actual business performance has come into stark focus with the latest financial figures. Concerns have also been raised regarding the potential use of the company as a financial lifeline, as Trump is currently unable to sell his shares or leverage them for a loan for six months due to a lockup provision in the company’s merger agreement.
Despite expecting further operating losses and negative cash flows, Trump Media remains optimistic about its growth potential, particularly through the appeal of Truth Social. However, uncertainties loom as the company expressed doubt about having enough funds to cover its debts as they become due, having paid significant interest expenses and accrued operating losses in the past year.
Trump, who did not contribute any personal funds to Trump Media, was allocated 78 million shares of the company last week. Additionally, he stands to gain millions more over the next three years if the stock maintains a certain value, according to recent filings. The company has also stated its intentions to make strategic investments in marketing, advertising sales, and technology using funds secured through a recent merger deal.
The board members of Trump Media, including prominent figures like Donald Trump Jr. and former trade representative Robert E. Lighthizer, have been subject to the same lockup agreement as Trump. The company’s chief executive, former Congressman Devin Nunes, has been awarded a substantial stake in the company, along with competitive salaries for top executives and retention bonuses for key personnel. Nonetheless, the company faces an uphill battle in gaining a wider audience for Truth Social, as its user base remains significantly smaller than other established online platforms like Reddit.
Amid ongoing challenges and financial uncertainties, Trump Media continues to strive for expansion and innovation, recently testing new technologies to enhance its services and cater to a broader user demographic. As the company navigates its way through a competitive digital landscape, the future of Trump Media and its flagship platform, Truth Social, remains fraught with obstacles and opportunities.