Former President Trump’s social media company saw a steep decline in the stock market on Monday after announcing a $58 million yearly deficit in official filings made on Monday.
Shares of Trump Media & Technology Group, the parent company of Trump’s Truth Social platform, decreased by approximately 24 percent shortly after 1 p.m. EDT. The share price fell to about $47.
Trump Media combined forces with “blank check” company Digital World Acquistion Corp. (DWAC) in March, which enabled Trump’s social media company to go public. DWAC shares closed at just under $50 the day before the newly merged company went public.
The decline in Trump Media shares occurred following the company's report of a $58 million loss last year in the Monday filings submitted to the Securities and Exchange Commission (SEC). Trump Media generated $4.1 million in revenue in 2023—and roughly $750,000 in the fourth quarter of 2023—compared to $16 million spent on operating expenses and $39.4 million on interest expenses, according to the filing.
Trump Media anticipates that it will continue to experience operating losses and negative cash flows from operating activities in the foreseeable future as it endeavors to expand its user base, attract more platform partners, and advertisers, as stated in the Monday filing.
“TMTG’s ability to become profitable and generate positive cash flow hinges on its success in growing its user base, platform partners, and advertisers,” the company continued, adding that it has begun testing video streaming and other content-hosting capabilities to broaden its appeal and usage.
“Given these uncertainties, TMTG believes it is premature for TMTG to predict when it will attain profitability and positive cash flows from its operations,” the company said.
Trump Media experienced a successful stock market debut, reaching a share price of $79.38 on its first day of trading. However, by Thursday, the end of trading for the week before the Easter holiday, the company’s stock price had settled around $62 per share.
Experts have expressed doubts about Trump Media’s long-term sustainability due to the disparity between its expenses and revenues, suggesting it displays characteristics of a “meme stock.”
Shannon Devine, a spokesperson for Truth Social, stated to The Hill last week, “With its transition into a public company, Truth Social aims to significantly expand and enhance the platform, while vehemently defending the free speech rights of our users. We are leading a movement to reaffirm free expression in the digital space.”
