Truth Social’s Parent Company Trump Media & Technology Group Plummets Over 21% in Market Value

The & Technology Group (DJT), the overseeing entity of 's social media platform Truth Social, encountered a notable setback of more than 21% in its stock value on Monday after a high-profile launch last week.

Donald Trump
Donald Trump (Image source: Twitter)

Closing at $48.66 on Monday, Trump Media registered a market capitalization of $6.65 billion, thereby attributing a stake worth $3.8 billion to the former president. Following the company's recent market entry, Trump's stake saw a reduction to slightly above $4.5 billion.

This decline in stock price follows the release of an updated regulatory filing early on Monday, which delineated the company's substantial financial losses and heightened risks linked with the former president's association with the platform.

As per the filing, Trump Media disclosed sales slightly surpassing $4 million while recording net losses nearing $60 million for the fiscal year ending Dec. 31. The company cautioned about anticipated ongoing losses amidst amplified profitability hurdles.

The filing underscored, “TMTG has historically incurred operating losses and negative cash flows from operating activities.”

“TMTG anticipates continued operational losses and negative cash flows from operating activities in the foreseeable future, as it endeavors to expand its user base, drawing more platform collaborators and advertisers.”

Since its inception, Truth Social has attracted approximately 9 million users. However, its future heavily hinges upon the “reputation and popularity” of former President Donald Trump.

“TMTG may confront heightened risks compared to conventional social media platforms due to the specificity of its offerings and the involvement of ,” the company elucidated, pointing out potential hazards including advertiser harassment and criticisms directed at Truth Social's moderation practices.

“The esteem of TMTG's brand may diminish should the popularity of President Trump wane.”

Of particular note, Trump Media unveiled its substantial reliance on advertising, with ad revenues constituting a “significant majority of our revenue.”

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“Should we experience a decrease in user numbers or engagement, including due to the departure of prominent individuals and entities who contribute content to Truth Social, advertisers may perceive Truth Social as less appealing for their marketing budgets, potentially leading to reduced spending with us, which would adversely affect our business and financial performance,” the company cautioned.

The filing further disclosed that stakeholders remain bound by a six-month lockup period before being permitted to sell or transfer shares.

The prospect of liquidating a portion of his holdings in the company could offer respite to the former president amidst facing a $454 million fraud penalty and contending with a shortfall in ahead of his anticipated 2024 electoral rematch against Biden.

The sole exception to the lockup period would arise if the company's board resolves to grant special dispensation. Although conceivable, experts informed Yahoo Finance last week that such an endeavor would likely result in numerous lawsuits filed on behalf of public shareholders.

Trump Media embarked on its public listing on the Nasdaq after merging with the special purpose acquisition company Digital World Acquisition Corp. in a deal ratified by shareholders towards the end of last month.

The former president initiated Truth Social after being banned from major social media platforms like Facebook and Twitter, now referred to as X, in the aftermath of the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on these platforms.

In the filing, Truth Social reiterated its objective of offering a “‘home' for marginalized content creators” and a platform to facilitate “candid global discourse without apprehension of censorship or ostracism” based on political viewpoints.

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