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Shares of Donald Trump\u2019s social-media business wiped out their gains from going public last week after the company disclosed that it lost more than $58 million in 2023, as revenue for the former president\u2019s Truth Social platform trickled in.<\/p>\n
Trump Media & Technology Group Corp.\u2019s stock fell as much as 22% on Monday to as low as $48.03 per share, below the $49.95 level where the blank-check vehicle it merged with was trading a week ago. The company has still delivered a meteoric gain this year to date, with its market value sitting at about $6.6 billion after it became a meme stock and captivated retail traders.<\/p>\n
The company generated just $4.1 million in revenue for the full year, results\u00a0reported<\/a>\u00a0in a filing Monday morning show, underscoring how richly valued Trump Media is relative to its peers. The company doesn\u2019t report active user numbers, disclosing in its prospectus in February only that Truth Social has about 9 million signups across its platforms.<\/p>\n Reddit Inc. \u2014 which went public last month and has a similar valuation \u2014 had 267.5 million\u00a0weekly active users<\/a>\u00a0in the last quarter, and delivered $804 million in revenue last year. Meanwhile Snap Inc., which has a market value of $19 billion, had a net loss of $1.3 billion on $4.6 billion in sales last year. Snap estimated daily active users for the first-quarter of about 420 million.<\/p>\n The discrepancy between where Trump Media\u2019s shares trade and how the underlying business performs indicates that investors use it as a way to bet on Trump\u2019s push for re-election. The stock, which has been trading since 2021 under the SPAC\u2019s ticker, has tripled this year as the retail-trading crowd pumps it with posts across Stocktwits and Reddit\u2019s WallStreetBets forum.<\/p>\n In the filing, Trump Media\u2019s revenue inched higher from $1.47 million in 2022 as it swung to an annual loss. The company recorded a $50.5 million profit in 2022 after getting a boost from a change in the value related to its convertible notes.<\/p>\n Unlike traditional social-media companies that tout metrics like active users or revenue per user, Trump Media \u201cbelieves that adhering to traditional key performance indicators\u201d could \u201cdivert its focus from strategic evaluation with respect to the progress and growth of its business,\u201d according to the prospectus. When regulators inquired about Truth Social\u2019s number of signups and users, the company pushed back, and ultimately disclosed only the signups,\u00a0filings<\/a>\u00a0show.<\/p>\n Trump owns a 57% stake in the company, according to the filings with the US Securities and Exchange Commission, which is worth about $3.7 billion as of Monday. That paper wealth is down nearly $2.5 billion from a Tuesday intraday peak. However, he can\u2019t sell the stake immediately due to a six-month lock-up agreement, hindering his ability to monetize the shares and ease his present cash crunch.<\/p>\n Trump\u2019s media company debuted last week after the closing of the merger with Digital World Acquisition Corp. brought in more than $275 million of much-needed cash. The media startup had warned that without the deal there were concerns that it could go bankrupt.<\/p>\n The heightened valuation has made it costly and risky to bet against with short sellers facing annual financing costs of 500% to borrow, according to brokerages. That makes it the most expensive US company to bet against with over $100 million of short interest by a large margin, data from financial analytics firm S3 Partners show.\u00a0<\/p>\n Trump currently faces legal troubles including four criminal prosecutions. The first criminal trial \u2014 alleging he falsified business records to conceal hush money payments to a porn star before the 2016 election \u2014 is set to start April 15. He also faces an April 4 deadline to post a $175 million bond after the New York attorney general proved at trial that he\u2019d inflated his net wealth by billions of dollars a year in bank transactions. He is appealing the judgement.\u00a0<\/p>\n<\/div>\nRe-Election Bet<\/h3>\n
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