Truth Social’s IPO unexpectedly made Donald Trump $4 billion – on paper. But the first setback occurred on Easter Monday.
Experts are talking about a bubble modeled after GameStop-Acts. Nevertheless, the first data after Trump Media & Technology Group (TMTG) debuted on the stock exchange last week turned out to be excellent. At $49.95, TMTG stock rose to just under $67 on its first trading day.
However, this Monday, the company presented data on its Truth Social networking business, and those numbers were not at all encouraging. As a consequence, TMTG’s price fell 21.5 percent. Donald Trump, who owns almost 60 percent of the company’s shares, lost more than $1 billion dollars within a single day. The stock price fell from $4.88 billion to $3.83 billion, according to the Guardian.
Last fiscal year, the former U.S. president’s media company reported a loss of $58 million on revenue of about $4 million. Interest expenses accounted for most of the loss, with about $16 million in operating expenses. On the revenue side, TMTG’s performance improved from the previous year, in 2022 it was just under $1.5 million. At that point, the company reported an annual profit of $50.5 million because of the tax benefits.
TMTG operates Trumps Truth Social, a social network that competes with services such as Platform X (formerly Twitter) for users and attention. Published figures show that the social network continues to struggle to attract advertisers. In the fourth quarter TMTG generated even less income than in the previous quarter, approximately $750,000.
Given the high losses in day-to-day operations, the company gave notice that it could run out of money. However, this is one of the usual mandatory warnings to investors in the U.S., which are not necessarily followed by a bankruptcy. Many of TMTG’s investors are small investors who are either trying to support Donald Trump or capitalize on the cult around him.
