Trump Media & Technology Group, the parent company of Truth Social, reported a significant net loss of $327.6 million in the first quarter of 2024, with revenue totaling $770,500, according to a filing with the Securities and Exchange Commission (SEC) on Monday. Following this announcement, the company’s stock prices experienced a sharp decline in the subsequent days.
The substantial loss was attributed, in part, to the expenses associated with merging with Digital World Acquisition Corp. to facilitate the company’s public listing at the end of March. Analysts have characterized Trump Media’s stock as resembling a meme stock due to its volatility and potential for overvaluation. They noted that investors in Trump Media may be more motivated by ideological considerations than typical investors.
In response to the financial results, Trump Media CEO Devin Nunes praised the company’s “legion of retail shareholders” who support its mission to combat Big Tech censorship and promote free speech. However, share prices plummeted during the week, closing at $44.19 on Tuesday, marking a 13.2% decrease from the previous Friday’s close.
Trump Media’s journey to going public began when former President Donald Trump founded the social media platform Truth Social in 2021 after being banned from other major platforms in the aftermath of the January 6, 2021, Capitol riot. The company completed its merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC), and commenced trading on the Nasdaq on March 26, 2024.
Despite an initially promising debut on the stock market, regulatory filings revealed that Trump Media operated at a loss in 2023, raising concerns about its financial viability. The company’s Q1 2024 filing showed a significant decline compared to the same period in the previous year, with revenue decreasing from $1.1 million to $770,500 and a substantial increase in net loss.
Trump himself holds over 114 million shares of Trump Media, but he cannot sell them until the end of September, six months after the company’s public listing. While Trump Media shares were once seen as a potential source of funding for Trump’s legal fees, the former president faces mounting legal challenges, including hefty civil judgments and ongoing criminal trials. Despite these setbacks, Trump remains optimistic about the future of his media venture.
