New York
CNN
—
Shares Truth Social's owner, Trump Media & Technology Group, collapsed on Monday, with the company losing more than $58 million and posting the lowest revenue in 2023.
Some experts say the statistics underscore that the multibillion-dollar valuation of Trump media defies logic and is reminiscent of a meme stock craze.
In a regulation Filing On Monday, Trump Media said it lost $58.2 million in 2023, compared with a profit of $50.5 million in 2022.
The Truth Social owner generated just $4.1 million in revenue, though that's expected to grow to $1.5 million in 2022.
Not only that, but revenue fell 39% year over year in the fourth quarter to just $751,500. Investors don't like to watch out for any startup, especially one valued at these levels.
Shares of Trump Media plunged 24% Monday afternoon following the new filings, though they are up nearly 200% so far this year.
The losses are so severe, Trump Media's accountants warned, that it “raises substantial doubt about its ability to continue as a going concern,” which Wall Street: We may not be able to stay in business. That warning echoes one made in November, when accountants said Trump Media would not survive unless it went public soon.
That long-delayed deal was finalized last week, paving the way for Trump Media to receive about $300 million in cash. The company can now use those funds to pay down debt and essentially build its infrastructure.
“I believe the $300 million in cash should eliminate this 'going concern' risk,” said Matthew Kennedy, senior IPO strategist at Renaissance Capital.
While Trump Media is losing money and making less revenue, Wall Street is That valued it at $11 billion, based on the stock's closing price on Friday, according to Renaissance Capital.
Trump Media generated just $4.1 million in revenue in 2023, while rival X (formerly known as Twitter) generated more than 100 times that — $665 million. 2013Ahead of its initial public offering in November 2013. Twitter also made quite a bit more $5 billion in revenue In the final year it was taken private by Elon Musk.
The problem with Trump Media is that its core product — Truth Social — is shrinking.
According to Similarweb, monthly active US users on iOS and Android fell 51% to 494,000 in February. By comparison, X has 75 million monthly active US users. According to Similarweb, Threads also has 10 times more users than Truth Social.
“2024 is a make-or-break year for this company,” Kennedy said. “The important thing for TMTG now is to face the money cannon that is the 2024 presidential election. And the company has a significant advantage. Trump-backed super PACs have raised millions. Where do you think they'll spend their digital ad buckets?
