This photo illustration shows an image of former President Donald Trump reflected on a phone screen displaying the Truth Social app in Washington on Feb. 21, 2022.
Stephanie Reynolds | AFP | Good pictures
Stock price Trump Media The social media app closely tied to former President Donald Trump fell sharply on Monday morning after the company reported a net loss. $58.2 million Revenue of just $4.1 million in 2023.
Trump Media & Technology Group Shares were trading up 18.8% as of 12:38 am ET.
Despite that decline, the company's market capitalization remained above $6.8 billion after its 8-K filing. Securities and Exchange Commission It posted a loss last year.
Most of the net loss appears to have come from interest expense of $39.4 million.
A company spokesman did not immediately respond to a request for comment on the new filing.
In 2022, the filing shows Trump Media's net profit was $50.5 million and gross revenue was just $1.47 million.
The company ended 2023 with just $2.7 million in cash, the filing said.
Last year's losses from Trump Media — owner of the Truth social app regularly used by the former president — could continue for some time, the company said.
“TMTG expects to incur operating losses for the foreseeable future,” the filing said, which came a week after the company began trading on Nasdaq under the ticker DJT.
The filing also warns shareholders that Trump's involvement in the company could be at greater risk than other social media firms.
TMTG disclosed to regulators that the company had identified “material weaknesses in its internal control over financial reporting” when it prepared its financial statements for the first three quarters of 2023.
On Monday, Trump Media said these “identified material weaknesses persist.”
Trump owns 57.3% of Trump Media, a stock worth more than $4 billion, more than half of his total net worth, Forbes said last week.
He will receive another 36 million shares of so-called “earned-out” stock over the next three years, as long as Trump Media's stock reaches a series of price milestones. All of these targets are well below the company's stock price at Monday's opening.
Shares of Trump Media rose in early trading on Tuesday, days after the company merged with a special-purpose acquisition firm, Digital World Acquisition Corp., which trades under the ticker symbol TWA. The newly merged company now trades under Trump's initials, DJD.
Analysts note that the company's high valuation is partly due to Trump's political supporters interested in owning part of a company most closely associated with the Republican presidential candidate buying the stock.
However, that enthusiasm creates unique risks for the company. In the new 8-K filing, Trump Media “may be subject to greater risks than conventional social media platforms because of the focus of its offerings and involvement with President Trump.”
“These risks include active discouragement of users, harassment of advertisers or content providers, increased risk of hacking of TMTG's site, decreased demand for a truth community if First Amendment speech is not suppressed, increased criticism of Truth Social, its moderation practices, and shareholder lawsuits . . .
