Despite a stellar debut on the Nasdaq, the stock market has not been impressed by Donald Trump’s Truth Social. Shares of Truth Social’s parent company, Trump Media & Technology Group, fell 21.5% as investors scrutinized the company’s financial condition.
Amidst the recession, Trump’s company’s ownership suffered a $1 billion blow on Monday. It came at the same time as the social media company disclosed a $58.2 million loss from the previous year and its auditor, BF Borgers of Colorado, raised “serious doubts” about the company’s viability.
The Trump media’s tumultuous journey on Nasdaq
Last week, Trump’s majority ownership in the company was valued at $4.88 billion. However, after the market declined on Monday, its value dropped to about $3.83 billion. On the first day of trading, the stock rose more than 30%, valuing Trump’s shares at more than $5.2 billion.
That initial excitement is gone. With the stock falling more than 6% on Thursday and 21% on Monday, the former president’s stake is now worth $3.8 billion.
Even though sales increased from $1.47 million in 2022 to $4.13 million in 2023, the figures show how small Trump Media’s operation is and how much money it has lost.
The losses, according to a company filing released Monday by Colorado-based BF Borgers, “raise substantial doubt about its ability to continue as a going concern.”
Trump Media acknowledged that because of the “focus on our offerings and President Trump’s involvement”, it may be at “greater risk” than other social media sites.
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Trump Media CEO Devin Nunes expressed excitement about running a publicly traded business. “Truth Social has over $200 million in the bank and will not incur any debt from the merger-related financial position in 2023, opening up many possibilities for expansion and enhancement of our platform,” he said.
Since the beginning of the year, share prices of Trump Media and Digital World Acquisition, the shell company that merged last week, have soared.
The company’s value is currently about the same as that of the recently publicized social network Reddit. Reddit reports revenue of $804 million and a loss of $90.8 million in 2023.
In 2023, Trump Media suffered a net loss of $58.2 million. The company reported an operating loss of $16 million, a slight improvement from $23.2 million in 2022 when interest expense on its debt was excluded.
Nowadays, Trump is a stock meme in the media
Thanks to Internet memes shared on sites like Truth Social, Trump Media has become known as a “meme stock” luring retail investors. It is now part of a select group of stocks that, along with GameStop, have recently caused a stir on Wall Street with their erratic and erratic rallies. After the initial surge, maintaining momentum has often proven difficult.
Trump has amassed billions of dollars in paper wealth thanks to his large ownership stake in Trump Media. Following the company’s merger with Digital World on Monday, Bloomberg revealed that the former president has become the first person to be listed among the world’s 500 richest people.
To raise billions of dollars from a potential sale, Trump would need to keep the stock at its recent highs, but he is unable to sell his stake at this time.
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