Trump Media stock closes 21% lower after company reports $58 million loss for 2023

The
share
price
of


Trump
Media
closed
trading
21.47%
lower
on
Monday,
hours
after
the
social
media
app
company
tied
to
former
President

Donald
Trump
reported
a
net
loss
of

$58.2
million
on
revenue
of
just
$4.1
million
in
2023.

Trump
Media
&
Technology
Group
shares
plunged
by
more
than
25%
around
1:08
p.m.
ET
before
recovering
slightly
later
in
the
day.

Trump
Media’s
closing
price
was
$48.66
per
share,
more
than
$30
lower
than
its
high
of
$79.38
per
share,
which
it
hit
last
week
on
the
heels
of
becoming
publicly
traded.

Despite
Monday’s
steep
drop,
the
company’s
market
capitalization
was
still
nearly
$6.6
billion.

But
as
of
Monday’s
closing
price,
Trump’s
shares
in
Trump
Media
were
worth
about
$3.8
billion,
or
around
$2.5
billion
less
than
they
were
last
week.

Earlier
Monday,
Trump
Media
in
its
8-K
filing
with
the

Securities
and
Exchange
Commission
since
it
went
public
through
a
merger
with
a
shell
company,
revealed
the
loss
for
last
year.

Much
of
the
net
loss
appears
to
come
from
$39.4
million
in
interest
expense,
according
to
the
filing.

A
spokesperson
for
the
company
—
which
owns
the

Truth
Social
app
routinely
used
by
the
former
president
—
when
asked
about
the
results
referred
CNBC
to
a
news
release
the
company
issued
Monday
evening.

In
that
release,
Trump
Media
CEO

Devin
Nunes
said, “We
are
excited
to
be
operating
as
a
public
company
and
to
have
secured
access
to
capital
markets.”

“Closing
out
the
2023
financials
related
to
the
merger,
Truth
Social
today
has
no
debt
and
over
$200
million
in
the
bank,
opening
numerous
possibilities
for
expanding
and
enhancing
our
platform,”
Nunes
said.

“We
intend
to
take
full
advantage
of
these
opportunities
to
make
Truth
Social
the
quintessential
free-speech
platform
for
the
American
people.”

The
SEC
filing
shows
that
in
2022,

Trump
Media
had
a
net
profit
of
$50.5
million
and
total
revenue
of
only
$1.47
million.

The
profit
was
due
overwhelmingly
to
$75.8
million
realized
from
a “change
in
fair
value
of
derivative
liabilities.”
This
refers
to
how
Trump
Media
convertible
promissory
notes
were
valued,
the
report
said.

The
losses
seen
last
year
by
Trump
Media
could
continue
for
some
time,
according
to
the
company.

“TMTG
expects
to
incur
operating
losses
for
the
foreseeable
future,”
says
the
filing,
which
came
a
week
after
the
company
began
trading
under
the
ticker
DJT
on
the
Nasdaq.

The
filing
also
warns
shareholders
that
Trump’s
involvement
in
the
company
could
put
it
at
greater
risk
than
other
social
media
companies.

TMTG
also
disclosed
to
regulators
that
the
company
had
identified “material
weaknesses
in
its
internal
control
over
financial
reporting”
when
it
prepared
a
previous
financial
statement
for
the
first
three
quarters
of
2023.

As
of
Monday,
Trump
Media
said
these “identified
material
weaknesses continue
to
exist.”

Trump
owns
57.3%
of
Trump
Media
shares,
a
stake
valued
at
$3.83
billion.

Forbes
last
week
reported
that
Trump’s
existing
shares
represent
well
more
than
half
of
his
total
net
worth.

He
also
stands
to
receive
another
36
million
shares
of
so-called
earn-out
shares
over
the
next
three
years,
as
long
as
Trump
Media’s
stock
during
that
time
hits
a
series
of
price
benchmarks.
These
targets
are
all
well
below
the
company’s
stock
price
early
Monday.

Trump
Media’s
share
price
rocketed
when
its
stock
began
trading
Tuesday,
several
days
after
the
firm
merged
with
a
special
purpose
acquisition
company,
Digital
World
Acquisition
Corp.,
which
had
been
traded
under
the
ticker
DWAC.
The
newly
merged
company
now
trades
under
Trump’s
initials,
DJT.

Analysts
note
that
the
company’s
high
valuation
is
partly
due
to
stock
purchases
by
Trump’s
political
supporters,
who
are
enthusiastic
about
owning
part
of
a
company
so
closely
associated
with
the
presumptive
Republican
presidential
nominee.

That
enthusiasm
creates
unique
risks
for
the
company,
however.
The
new
8-K
filing
says
that
Trump
Media “may
be
subject
to
greater
risks
than
typical
social
media
platforms
because
of
the
focus
of
its
offerings
and
the
involvement
of
President
Trump.”

In
a
later
10-K
filing
with
the
SEC
on
Monday,
Trump
Media
listed
several
risks
related
to
its
most
famous
shareholder.

“TMTG’s
success
depends
in
part
on
the
popularity
of
its
brand
and
the
reputation
and
popularity
of
President
Trump,”
the
10-K
filing
said. “Adverse
reactions
to
publicity
relating
to
President
Trump,
or
the
loss
of
his
services,
could
adversely
affect
TMTG’s
revenues
and
results
of
operations.”

That
filing
also
noted, “President
Trump
is
the
subject
of
numerous
legal
proceedings.
An
adverse
outcome
in
one
or
more
of
the
ongoing
legal
could
negatively
impact
TMTG.”