Trump Media & Technology Group plunged Monday after the company revealed it generated very little revenue in 2023.
Former President Donald Trump’s social media company Trump Media & Technology on Monday declared that it lost around $58.2 million last year, marking a stark decline compared to the company’s 2022 profit, which was around $50.5 million.
Shares of Trump Media Tumbles 21%, Though They Are Still Up 200%
Less than a week after Donald Trump’s net worth skyrocketed to $6.5 billion, making him one of the richest people in the world, Trump’s social media company‘s shares plunged on Monday after it disclosed its 2023 revenue dip. Though Trump’s net worth skyrocketed last week, hitting $6.5 billion, it tumbled by more than $1 billion on Monday following the revelation made by the company that Trump, himself is the major shareholder of Trump Media & Technology.
In a regulatory filing on Monday, the company rep disclosed it lost $58.2 million in 2023, which was not expected as in 2022, the profit made was around $50.5 million. Considering the hype surrounding the start-up, the investors were not expecting its revenue to tumble 39% year-over-year, earning just $751,500 in the fourth quarter.
Trump owns 78.8 million shares in the public company which is now worth around $3.8 billion. Though it is a big amount and represents a massive boost to Trump’s new net worth, it is still significantly low when compared to his net worth last week which was about $6.3 billion.
The losses disclosed on Monday are so visible that some of the company’s media accountants warned at the time that it would be difficult for the company to continue abruptly as a problem. They have been constantly advising Trump to make the merger deal public to sustain itself in the market.
After a long delay, the merger deal was completed last week earning Trump Media $ Technology an influx of approximately $300 million in cash. The company can now pay out the debts that it has, particularly, on its infrastructure development.
After the merger went public last week, the senior IPO strategist at Renaissance Capital said he believe the cash earned via the merger “should remove the ongoing concern risk.”
“It won’t take that long to burn the cash it raised if they continue to lose it at the current rate,” said Michael Ohlrogge, an associate professor at NYU School of Law. However, he further suggested that the company could still withstand the loss if they raised more cash by selling additional stocks.
Based on the stock’s closing price on Friday, the company opened with as much as $11 billion on Monday. However, it tumbled to $8.8 billion by the end of the day.
While Trump’s social media company has just made a revenue of $4.1 million in 2023, its rival X, formerly known as Twitter) earned as much as $665 million that year, before its initial public offering. The platform also generated over a whopping $5 billion in revenue in 2023 even before Elon Musk came into the picture.
Currently, Truth Social’s financials are being compared to the revenue and net loss of the upstart digital news outlet, The Messenger, which according to the reports earned a revenue of $3.8 million in 2023 with a net loss of $43 million.