Shares in Trump Media & Technology Group, owner of Truth Social, dropped 21.5% on Monday after the company reported a net loss of $58.2m for 2023. The decline wiped over $1bn from the value of Donald Trump's stake, reducing it from $4.88bn to approximately $3.83bn.
The company's auditor, BF Borgers of Colorado, expressed 'substantial doubt' about Trump Media's ability to continue as a going concern, citing ongoing losses. Trump Media generated only $4.13m in sales last year, up from $1.47m in 2022, but still minimal relative to its losses.
In its regulatory filing, Trump Media acknowledged it faces 'greater risks' than other social media platforms due to its focus on Trump. CEO Devin Nunes struck an optimistic tone, stating the company is 'debt-free and over $200m in the bank' after the merger with Digital World Acquisition.
Despite the poor financials, Trump Media's stock has surged since the start of the year, behaving like a 'meme stock' driven by retail investors. The company now has a valuation comparable to Reddit, which generated $804m in sales in 2023.
Trump, who faces hefty legal costs including a $454m civil fraud judgment, cannot sell his stake immediately. He recently secured a reduced bond of $175m to appeal the fraud case.
