In 2023, the financial performance of Trump Media & Technology Group (TMTG) raised concerns among investors. Despite generating $4.1 million in revenue, a sharp drop in the fourth-quarter revenue by 39% year-over-year to just $751,500 raised doubts about the company’s future viability.
Following the financial revelations, TMTG shares fell by 21% on Monday afternoon. However, despite these losses, the stock had seen a significant rise of nearly 200% since the start of the year.
In an attempt to ease these concerns, TMTG recently merged with another company and received approximately $300 million in cash. Despite this infusion of funds, TMTG still faces challenges due to its lower valuation compared to competitors like X (formerly Twitter), which generated revenues of $665 million in 2013. Additionally, the user base for Truth Social has been shrinking, with monthly active users decreasing by 51% year-over-year to just 494,000.
According to Matthew Kennedy, senior IPO strategist at Renaissance Capital, “2024 is the make-or-break year for this company.” For TMTG, seizing opportunities presented by the 2024 presidential election is crucial. This includes allocating digital ad investments from Trump-backed super PACs that have already raised millions.
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