Trump Media & Technology Group, the parent company of Truth Social, released its first earnings report since going public on Easter Monday. The report showed that the company had a net loss of $58.2 million in 2021 and a net loss of $50.5 million in 2022. The company also warned investors about potential difficulties in repaying its debts and projected continued operating losses and negative cash flow in the future.
This news sent Trump Media’s stock price plummeting by 21%, erasing gains made in the previous week, reaching $48.66. Despite this drop, Trump Media’s market value remains over six billion dollars. However, analysts believe that the company may not pose a real challenge to larger social media platforms such as X, Instagram or Tiktok. In comparison to Reddit, which generated $800 million in revenue last year, Truth Social’s revenue was only $4.1 million in 2021, with a significant decline from the fourth quarter of last year when it dropped to less than a million dollars.
Truth Social has not disclosed its number of active users but only stated that 8.9 million accounts have been created on the platform so far. The future of Truth Social and Trump Media remains uncertain due to their financial struggles and lack of profitability strategy. Analysts believe that the high valuation of Truth Social contributed to its sharp decline and that it may face challenges in competing with established social media giants like X, Instagram or Tiktok.
Despite these challenges, there are those who see potential for growth for Truth Social – including some politicians who have already started using it as an alternative to other platforms where they faced censorship or misinformation campaigns.
In conclusion, while Trump Media has faced financial struggles and uncertainty regarding its future profitability, it remains to be seen whether they will be able to overcome these obstacles and become a major player in the social media industry like X, Instagram or Tiktok.
