Trump Media stock plunges as 2023 Truth Social loss put at $58 million

Former president Donald Trump’s social media company said Monday it lost more than $58 million last year, sending its stock plunging more than 21 percent only days after a highflying public debut set the company’s value at more than $8 billion.

Trump Media and Technology Group, which owns Truth Social, said in a Securities and Exchange Commission filing that the company generated just over $4 million in revenue last year, including less than $1 million in the last quarter.

The nosediving share price of the company — which uses the stock ticker DJT, for Trump’s initials — fell to its lowest level since Trump Media went public last week and shaved more than a fifth of its market value in a single day. It also slashed the value of Trump’s 57 percent ownership in the company by roughly $1 billion, to $3.8 billion.

The new financial figures throw into stark relief the gap between Trump Media’s highly hyped investor-driven valuation on the public stock market and the reality of its business performance.

They also raise questions about the possibility that Trump could use the company as a financial lifeline. Trump cannot sell his shares or use them as collateral for a loan for six months because of a provision in the company’s merger agreement, known as a lockup.

The company’s board could vote to waive that requirement but has yet to do so, the filings state. Cashing out early could sink the stock price further by flooding the market with shares and undermining investor confidence in Trump’s commitment to the brand, financial analysts said.

Trump, who invested no money in Trump Media, was given 78 million shares of the company last week and stands to earn tens of millions more over the next three years if the stock stays above $12 to $17, a filing shows.

Trump Media said in a filing that it expects to incur more “operating losses and negative cash flows” as it works to expand its user base but that it expects its growth will come from Truth Social’s “overall appeal.”

The company said in a filing that its management had “substantial doubt” as of the end of last year that it would have enough money to pay its debts as they come due. The company paid nearly $40 million in interest expenses last year and racked up about $16 million in operating losses.

Trump’s company unlocked nearly $300 million in investor funds last week when it finalized a merger deal with Digital World Acquisition, a special purpose acquisition company that helped take Trump Media public.

Trump Media said in a filing that it aimed to spend some of that money toward “strategic investments” in marketing, advertising sales and other technology. About $18 million of it was also paid toward an SEC settlement announced last year.

The company has declined to share performance indicators like those common across the tech industry, such as its number of active users, and said it may continue to withhold such figures. Focusing on those numbers, the company said, “might not align with the best interests” of Trump Media or its shareholders.

Trump Media’s wild booms and busts over the last week have driven some observers to regard it as a “meme stock,” whose value is derived less from its fundamentals and more from investors’ personal feelings about its namesake brand.

That separation of stock value from the company’s ability to make money could hurt it in the long run, said Jay Ritter, a University of Florida finance professor who predicted the share price would continue to decline.

“The stock will almost certainly remain extremely volatile, with both some big upswings and downswings on a daily basis,” he said. But “the long-term trend will be down.”

Trump Media, which makes money through advertising on Truth Social, has struggled to gain a broad audience after two years of operation, according to estimates from the online analytics firm SimilarWeb. On the company’s first day of public trading last week, Truth Social’s website saw its highest-traffic day of the month, with roughly 277,000 U.S. visitors, the estimates show.

That is a small fraction of most online platforms: On that same day, the discussion-board service Reddit saw more than 32 million U.S. visitors, the estimates show. Reddit, which went public a few days before Trump Media and is trading at a similar stock price, generated $800 million in revenue last year, or more than 200 times Trump Media’s 2023 revenue.

Trump’s company said it has begun testing a “state-of-the-art technology that supports video streaming and provides a ‘home’ for canceled content creators,” which it “aims to acquire and incorporate into its product offerings and/or services as soon as practicable.” The company did not respond to a request for comment seeking further details.

The Trump Media board includes Trump’s son Donald Trump Jr.; Robert E. Lighthizer, Trump’s former trade representative; Linda McMahon, his former administrator of the Small Business Administration; and Kash Patel, who served on Trump’s National Security Council and was paid $130,000 by Trump Media last year through a consulting agreement.

Trump Media’s chief executive, the former Republican congressman Devin Nunes, was given 115,000 shares, a stake worth more than $5 million today. He and other board members are bound by the same lockup agreement.

Nunes is paid a $750,000 salary that is subject to increase to $1 million within two years, filings show. The company chief financial officer, Phillip Juhan, and chief operating officer, Andrew Northwall, are each paid about $350,000. Nunes, Juhan and Northwall will also each receive $600,000 “retention bonuses” this month.

Dan Scavino Jr., Trump’s White House social media director and an adviser to his 2024 presidential campaign, was also paid $240,000 last year through a consulting agreement that listed him as an independent contractor, a filing shows. He, too, will be given a $600,000 retention bonus.

Trump himself could receive 36 million more shares in the coming weeks as long as the stock price stays above $17.50 for “20 out of any 30 trading days,” according to a company “earnout” provision.

The company’s filings Monday note that five lawsuits have been filed in recent weeks involving Trump Media, Digital World, Trump Media’s co-founders Andy Litinsky and Wes Moss, and Digital World’s former chief Patrick Orlando.

Digital World dropped one lawsuit last week after its biggest founding investor — Arc Global Investments II, which is managed by Orlando — voted in favor of the merger. But the other cases are still active, and they include claims from Litinsky, Moss and Orlando that the company had worked to improperly dilute their shares.

Trump Media said in a Monday filing that one ongoing lawsuit, jointly filed by Trump Media and Digital World against Orlando and Arc, could prove “costly and time consuming” and have an adverse effect on Trump Media’s reputation.

In the newest lawsuit, filed last week in a Florida circuit court, Trump Media alleged that Moss and Litinsky had mismanaged the company but that Truth Social had since become “among the fastest growing social media platforms in history.”


A previous version of this article misstated the position of a member of Trump Media’s executive team due to a misstatement in the company’s filing. Andrew Northwall is the company’s chief operating officer, not its chief financial officer. The article has been corrected.

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