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Trump Media & Technology Group Suffered Huge Losses in 2023
April 1, 2024
Shares of Trump Media & Technology Group (TMTG), the owner of Truth Social, saw a sharp decline on Monday following the revelation of substantial losses in 2023. Financial filings showed a staggering loss of $58.2 million, a stark contrast to the $50.5 million profit in the previous year.
Revenue for TMTG remained low, with just $4.1 million generated in 2023, although it marked an improvement from $1.5 million in 2022. However, fourth-quarter revenue plummeted by 39% year-over-year to a mere $751,500, raising concerns among investors.
The market response was swift, with TMTG shares dropping by 21% on Monday afternoon. Despite this, the stock had experienced a significant rise of nearly 200% since the beginning of the year.
The financial troubles have led TMTG’s accountants to express doubts about the company’s ability to continue operations, a sentiment echoed in previous warnings. However, the completion of a long-awaited merger last week injected approximately $300 million in cash, potentially alleviating concerns about TMTG’s viability.
Despite its lofty valuation of up to $11 billion, TMTG lags behind competitors like X (formerly Twitter), which boasted revenues of $665 million in 2013 before its initial public offering. Additionally, the user base for TMTG’s primary product, Truth Social, is dwindling, with monthly active users plummeting by 51% year-over-year to 494,000. In comparison, X has 75 million monthly active users in the U.S. According to Similarweb, “Even Threads has more than 10 times as many users as Truth Social.”
“2024 is the make-or-break year for this company. For TMTG the thing that matters now is getting in front of the cash cannon that is the 2024 presidential election. And the company does have one notable advantage. Trump-backed super PACs have raised millions. Where do you think they’ll spend their digital ad buckets?”
Matthew Kennedy, senior IPO strategist at Renaissance Capital, via CNN
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