Donald Trump’s social media company, Truth Social, suffered a significant loss of $58 million in fiscal 2023, which is likely to raise concerns about its volatile public trading debut, likened to “meme stocks” like AMC and GameStop. The company only generated $4.1 million in revenue during the 12-month period, an improvement from the previous year’s $1.47 million in sales. The revenue came primarily from advertisements on the social media app.
Trump Media & Technology Corp., the parent company of Truth Social, began trading under the ticker symbol “DJT” last week. The stock price initially surged by nearly 60% to almost $80 per share but fell as much as 10% to around $55.79 following the release of the regulatory filings on Monday. Donald Trump, who owns a majority stake in the company, is currently facing various legal issues that could impact his involvement in the business and his ability to run for president in 2024.
The company’s filings acknowledged that its success is closely tied to the popularity and reputation of President Trump, stating that any negative publicity or loss of Trump’s services could have adverse effects on revenues and operations. Experts have raised concerns about the company’s trading performance being disconnected from its fundamentals, posing risks for retail investors who have invested in the stock. Despite its modest sales and user base, Trump’s company is currently valued at nearly $7.5 billion, propelling him into the top 500 on the Bloomberg Billionaires Index.
Truth Social had an estimated 494,000 monthly active users for its mobile app in February, significantly lower than other popular platforms like Facebook and Elon Musk’s X. Speculation arose that Trump might sell some of his holdings to cover mounting legal costs, including a $175 million bond payment due in connection to a civil fraud case in New York. However, the filings indicated that a six-month lock-up agreement is still in effect, preventing Trump and other shareholders from selling their shares without board approval.
The success of Trump Media prompted theories that the former president might sell some of his shares to fund legal expenses, such as the $175 bond payment due in connection to a civil fraud case in New York this week. The filings indicated that a six-month lock-up agreement was in place, preventing Trump and other shareholders from selling their shares without board approval. It was also noted that Trump could request a special waiver to bypass the agreement if needed. Axios was the first to report on the regulatory filings, shedding light on the financial challenges and uncertainties facing Trump’s social media endeavor.
