Former president, Donald Trump’s Media & Technology Group (DJT), the parent company of Donald Trump’s social media platform Truth Social has reportedly recorded net losses which reached nearly $60million in 2023.
It was learnt that the company recorded sales of just over $4 million as net losses reached nearly $60 million from January to December, 2023.
The company warned it expects losses to continue amid greater profitability challenges.
“TMTG has historically incurred operating losses and negative cash flows from operating activities,” the filing read.
“TMTG expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.”
Truth Social has lured about 9 million users since its inception. But its success largely depends on the “reputation and popularity” of former President Donald Trump.
“TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Trump,” the company said, citing risks that include the harassment of advertisers
and criticism of Truth Social’s moderation practices.
“The value of TMTG’s brand may diminish if the popularity of President Trump were to suffer.”
Notably, Trump Media revealed that it heavily relies on advertising, with ad sales contributing to a “substantial majority of our revenue.
“If we experience a decline in the number of users or a decline in user engagement, including as a result of the loss of high-profile individuals and entities who generate content on Truth Social, advertisers may not view Truth Social as attractive for their marketing expenditures, and may reduce their spending with us, which would harm our business and operating results,” the company warned.
The filing also revealed stakeholders are still subject to a six-month lockup period before selling or transferring shares.
Trump maintains a roughly 60% stake in Truth Social, a stake currently worth more than $3 billion at current trading levels.
The opportunity to cash in by selling some of his stake in the company could help the former president as he faces a $454 million fraud penalty and grapples with a campaign fundraising shortfall ahead of his 2024 election rematch against Biden.
The only exception to the lockup period would be if the company’s board votes to make a special dispensation. Although possible, experts told Yahoo Finance last week the attempt would likely result in multiple lawsuits on behalf of public shareholders.
Trump Media went public on the Nasdaq after merging with special purpose acquisition company Digital World Acquisition Corp in a deal approved by shareholders late last month.
The former president founded Truth Social after he was kicked off major social media apps like Facebook and Twitter, the platform now known as X, following the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on those platforms.
In the filing, Truth Social maintained its goal of providing a “‘home’ for cancelled content creators” and a space to hold “honest global conversation without fear of being censored or cancelled” due to political viewpoints.
