The photo illustration above shows former President Donald Trump’s social media platform Truth Social on a cell phone in Chicago, Illinois. On Monday, March 25th, 2024, Truth Social owner Trump Media & Technology Group disclosed that it had lost more than $58 million and generated very little revenue in 2023. This news underscores why some experts warn that Trump Media’s multibillion-dollar valuation defies logic and is reminiscent of the meme stock craze.
In a regulatory filing on Monday, Trump Media said it had lost $58.2 million in 2023, compared with a profit of $50.5 million in 2022. The company generated just $4.1 million in revenue, although this was an increase from $1.5 million in 2022. However, these losses are so severe that Trump Media’s accountants warn they “raise substantial doubt about its ability to continue as a going concern,” which is Wall Street for: We may not be able to stay in business. This warning echoes one made in November when accountants said Trump Media might not survive unless it soon completes its merger to go public. That long-delayed deal was completed last week, paving the way for Trump Media to receive an influx of approximately $300 million in cash.
Shares of Trump Media tumbled more than 22% Monday following the new filings despite the fact that the company generates scant revenue and loses money each year, Wall Street has valued the company by as much as $11 billion based on the stock’s closing price Friday according to Renaissance Capital. While Truth Social owner made just $4.1 million in revenue in 2023, rival X (formerly known as Twitter) raked in more than 100 times that much — $665 million — ahead of its initial public offering in November 2013 and generated just over $5 billion in revenue before being taken private by Elon Musk which clearly shows how far behind they are compared to their competition
