This photo illustration shows an image of former President Donald Trump reflected on a mobile phone screen showing the Truth Social app on February 21, 2022 in Washington, DC.
Stephanie Reynolds | AFP | Getty Images
The stock price is Trump Media A social media app company with close ties to former President Donald Trump reported a net loss Monday morning $58.2 million Revenue in 2023 is only $4.1 million.
Trump Media Technology Group The stock was down more than 14.5% as of 11 a.m. ET.
Despite the plummeting share price, the company’s market capitalization is still over $6 billion following its 8-K filing with the Securities and Exchange Commission. Securities and Exchange Commission Last year’s losses were disclosed.
Most of the net loss appeared to come from $39.4 million in interest expenses, according to the filing.
A company spokesman did not immediately respond to a request for comment on the new filing.
Documents show that in 2022, Trump Media’s net profit was US$50.5 million, with total revenue of only US$1.47 million.
Trump Media has told regulators that its losses last year may continue for some time. The company is the owner of the “Truth Social” app frequently used by the former president.
“TMTG expects to incur operating losses for the foreseeable future,” the filing said. The filing comes a week after the company began trading on Nasdaq under the ticker DJT.
The filing also warned shareholders that Trump’s involvement in the company could expose it to greater risks than other social media companies.
TMTG also disclosed to regulators that the company discovered “material deficiencies in internal control over financial reporting” when preparing its financial statements for the first three quarters of 2023.
As of Monday, Trump Media said those “identified significant deficiencies remain.”
Trump owns 57.3% of Trump Media, with shares worth more than $4 billion.
Trump Media Co. will also receive an additional 36 million so-called “income” shares over the next three years as long as the company’s shares hit a series of price benchmarks during that period. Those targets are well below the company’s stock price earlier on Monday.
Shares of Trump Media Co., which trades under the ticker DWAC, soared just days after the company merged with Digital World Acquisition Corp., a special purpose acquisition company. The newly merged company now trades under Trump’s initials “DJT.”
Analysts noted that the company’s high valuation is partly attributable to stock purchases by Trump’s political supporters, who are keen to own a piece of a company with close ties to the Republican presidential candidate.
However, this enthusiasm creates unique risks for the company. The new 8-K filing says Trump Media “may face greater risks than typical social media platforms due to the focus of its products and President Trump’s involvement.”
“These risks include active dissuasion by users, harassment by advertisers or content providers, an increased risk of the TMTG platform being hacked, reduced demand for Truth Social if First Amendment speech is not suppressed, and increased demand for Truth Social Criticism of Social’s audit practices and increase in shareholder lawsuits.”
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