An auditor has expressed doubts about the financial viability of Donald Trump’s publicly traded company, Trump Media and Technology Group, after it reported significant losses in 2023. The company, which operates the Truth Social platform, recorded losses of $58.2 million against total revenues of $4.1 million. The largest expense listed was interest payments totaling over $39 million. The independent accounting firm, BF Borgers CPA PC, issued a note warning that Trump Media’s operating losses cast doubt on its ability to continue as a going concern. This information was disclosed in a regulatory filing with the Securities and Exchange Commission.
The filing also revealed that Trump Media expects to continue operating at a loss in the near future as it focuses on expanding Truth Social’s user base and attracting advertisers. The company stated that it would be premature to predict when it will achieve profitability and positive cash flows from its operations, indicating that it may require additional funding ranging from $5 million to $60 million. Trump Media recently went public, giving the former president a paper net worth of about $7 billion, although he is unable to sell his shares in the company for six months. Analysts have warned that the value of the company could drop significantly if Trump were to sell his shares.
In the wake of the news about its financial losses, shares of Trump Media fell by over 10%, bringing the company’s market value to approximately $7 billion. Analysts anticipate that trading in the stock will be volatile as the legal and political landscape surrounding the former president evolves, particularly as he pursues a potential return to the White House. Some experts have drawn comparisons between the company’s stock and cryptocurrencies, suggesting that investors may be drawn to Trump Media shares not for future cash flows but as a means of expressing their beliefs and affiliations. This sentiment may contribute to fluctuations in the stock price.
Despite the challenges facing Trump Media, the company has experienced a surge in interest, with its stock initially compared to so-called “meme stocks.” However, the release of financial data indicating significant losses has underscored concerns about the company’s financial health. While Trump Media has reaffirmed its commitment to expanding its user base and attracting advertisers, the note from the auditor raises questions about its long-term sustainability. This uncertainty could impact the company’s stock value and overall performance in the coming months, particularly in relation to the former president’s potential actions involving his shares. It remains to be seen how Trump Media will navigate these challenges and whether it can overcome the doubts raised by the auditor.
